SIP vs Step-up SIP: Starting at Rs 7,000, Rs 10,000 or Rs 12,000 per month, how small increments can make a big difference in your returns over long term
Let’s understand how starting with Rs 7,000, Rs 10,000, or Rs 12,000 per month in SIPs and increasing it over time with Step-up SIPs can help an individual grow their money faster in the long run.
Systematic Investment Plans (SIPs) are a popular way to invest in mutual funds to build a satisfactory amount to meet your financial goals. However, adding a Step-up SIP strategy to your investments can help turn up your returns over time. If you start with a fixed amount, such as Rs 7,000, Rs 10,000, or Rs 12,000 per month, and increase it periodically, you can benefit from the power of compounding more effectively. Thus, comparing SIP and Step-up SIP can give you a better understanding of how minor increments can create a big difference in achieving long-term financial goals.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
A systematic investment plan (SIP) is a method of investing in a mutual fund SIP where an individual invests a fixed amount regularly to fulfill their financial goals.
What is Step-up SIP?
A step-up SIP allows investors to increase their SIP contributions by a fixed amount or percentage at regular intervals.
Example to understand Step-up SIP
For example, as an investor, if you start a monthly SIP of Rs 10,000, the amount can increase by 5% or 10% after a year. Resulting in Rs 500 or Rs 1,000 increase in SIP amount.
SIP vs Step-up SIP
In step-up SIP one can register a gradual increase in SIP amount. Whereas, regular SIP maintains a consistent SIP amount throughout the tenure.
Regular SIP: How much Corpus one can generate with Rs 7000 monthly SIP at 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus will be Rs 4,54,66,883. During this time, the invested amount will be approximately Rs 29,40,000 and estimated capital gains will be Rs 4,25,26,883.
Step-up SIP: How much Corpus one can generate with Rs 7000 monthly SIP at 5 per cent annual step up and 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus with 5 per cent annual step and 12 per cent annualised return will be Rs 6,97,87,269. During this time, the invested amount will be approximately Rs 75,86,906 and estimated capital gains will be Rs 6,22,00,363.
Regular SIP: How much Corpus one can generate with Rs 10000 monthly SIP at 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus will be Rs 6,49,52,691. During this time, the invested amount will be approximately Rs 42,00,000 and estimated capital gains will be Rs 6,07,52,691.
Step-up SIP: How much Corpus one can generate with Rs 10000 monthly SIP at 5 per cent annual step up and 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus with 5 per cent annual step and 12 per cent annualised return will be Rs 9,96,96,098. During this time, the invested amount will be approximately Rs 1,08,38,437 and estimated capital gains will be Rs 8,88,57,661.
Regular SIP: How much Corpus one can generate with Rs 12000 monthly SIP at 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus will be Rs 7,79,43,229. During this time, the invested amount will be approximately Rs 50,40,000 and estimated capital gains will be Rs 7,29,03,229.
Step-up SIP: How much Corpus one can generate with Rs 12000 monthly SIP at 5 per cent annual step up and 12 per cent annualised return
If individuals start investing at the age of 25, by the time they turn 60 the estimated corpus with 5 per cent annual step and 12 per cent annualised return will be Rs 11,96,35,318. During this time, the invested amount will be approximately Rs 1,30,06,124 and estimated capital gains will be Rs 10,66,29,193.
SIP vs Step Up SIP: Which can help generate larger corpus on Rs 7,000 monthly investment for 35 years
SIP corpus in 35 years: Rs 4,54,66,883
Step Up SIP corpus in 35 years: Rs 6,97,87,269
SIP vs Step Up SIP: Which can help generate larger corpus on Rs 10,000 monthly investment for 35 years
SIP corpus in 35 years: Rs 6,49,52,691
Step Up SIP corpus in 35 years: Rs 9,96,96,098
SIP vs Step Up SIP: Which can help generate larger corpus on Rs 12,000 monthly investment for 35 years
SIP corpus in 35 years: Rs 7,79,43,229
Step Up SIP corpus in 35 years: Rs 11,96,35,318