Step Up SIP Calculator - Calculate Returns with Annual Step-Up

Purchasing mutual fund through a SIP is one of the most preferred ways to create wealth in the long-run. But if you want to get better returns and wish to have your investment portfolio in line with your rising income, you should use the top up SIP or Step Up SIP feature. The Step-Up SIP Calculator 2024 is a tool which assists in making you aware of future values of your investments with an option of increasing the SIP amount each year by entering a percentage of investment you increase annually.

What is a Step-Up SIP?

A Step-Up SIP means that you can step up your SIP amount periodically, which is usually on a yearly basis. This helps you leverage your income and is designed to try and increase your rate of saving by investing more as your income increases. For instance, by investing Rs. 1000 per month in a mutual fund and increasing it to 10% every year, your investment will yield astronomical returns.

Benefits of Step-Up SIP

• Increased Wealth Creation: Since you invest an increased amount into your SIP every year, and the effect of power of compounding and rupee-cost averaging takes place, you get to make more money with re-investment due to accruing interest.
• Aligns with Income Growth: Since you increase your investments per month in proportion with your income, your investment will also yield bigger returns that is alignment with your financial goals
• Better Financial Planning: Step UP SIPs allow you to plan your financial future in a better way
• Inflation Beater: Continually adding money on a consistent basis works to fight against inflation so that the money you are going to earn in future has enough value as per the market standards.

How to Use the Step-Up SIP Calculator?

The Step-Up SIP Calculator 2024 is easy to use and delivers an accurate prediction as to how your investment will grow in the future. Here’s how you can use it:

• Enter Initial SIP Amount: Enter the amount you wish to invest each month.
• Step-Up Percentage: Put the specific annual rate of your SIP amount increase, it must be entered in percentage
• Investment Duration: Select the total duration you want for your SIP investment you want to make in years.
• Expected Rate of Return: Insert the rate of expected return per year of your investments

When you have entered these details, the calculator will then generate a projection of the amount that your investments should achieve in the future taking into account the annual step up.

Step-Up SIP Example Calculation:

Let’s walk through an example using the Step-Up SIP Calculator 2024, assuming all amounts are in Indian Rupees (INR).

Inputs:

• Initial SIP Amount: ₹5,000 per month
• Step-Up Percentage: 10% annually
• Investment Duration: 20 years
• Expected Rate of Return: 12% per annum

Calculation Breakdown:

• Initial SIP Amount: ₹5,000 per month
• First Year Contribution: ₹5,000 * 12 = ₹60,000
• Second Year Contribution (after 10% increase): ₹5,500 per month
  1. ₹5,500 * 12 = ₹66,000
• Third Year Contribution (after another 10% increase): ₹6,050 per month
  1. ₹6,050 * 12 = ₹72,600
• And so on for each subsequent year…

Total Investment:

To calculate the total investment amount over 20 years, we need to account for the annual increase in SIP contributions. This is a step-by-step process where each year’s investment amount increases by 10%.

Future Value Calculation:

The future value of the investments also needs to factor in the annual compounding at the expected rate of return of 12%.

Detailed Example:

1. Year 1:
   • Monthly SIP: ₹5,000
   • Annual Investment: ₹5,000 * 12 = ₹60,000
   • Future Value at the end of 20 years: ₹60,000 * (1 + 12/100)^20 = ₹576,387
2. Year 2:
   • Monthly SIP: ₹5,500 (10% increase)
   • Annual Investment: ₹5,500 * 12 = ₹66,000
   • Future Value at the end of 19 years: ₹66,000 * (1 + 12/100)^19 = ₹547,971
3. Year 3:
   • Monthly SIP: ₹6,050 (10% increase)
   • Annual Investment: ₹6,050 * 12 = ₹72,600
   • Future Value at the end of 18 years: ₹72,600 * (1 + 12/100)^18 = ₹520,989
4. Continue this for each year up to 20 years…

Summing Up:

By summing up the future values of all individual years, we can find the total future value of the investment.

Using the above method for each year, the calculator will provide the final future value of your investments.

Final Future Value:

Assuming the calculation for each year as described above, the total future value at the end of 20 years would be approximately:

• Total Investment Amount: ₹2,666,348
• Future Value of Investment: ₹48,000,000 (approximately, considering compounding and annual increases)

This illustrative example shows how the initial investment amount, annual step-up percentage, investment duration, and expected rate of return contribute to the growth of your wealth over time using the Step-Up SIP strategy.

Why Choose Step-Up SIP Calculator at Fincover?

• Accurate Projections: Input your parameters and get the most accurate estimation
• Easy to Use: The calculator is easy to use and gives you accurate estimate of your returns
• Visual Representation: Get a visual representation of how much your investment has grown
• Customizable: You can easily input the period of investment according to your convenience

FAQs on Step-Up SIP Calculator

1. What is the least step-up percentage I need to select?

The minimum step-up percentage you can choose is 5% of the monthly contribution towards SIP

2. Is it possible to get a change in step-up percentage in the middle of my systematic investment plan?

Once you have enrolled for SIP Top Up with an annual percentage, the details cannot be modified. In case you want to make any changes, you will have to stop the existing SIP and begin a new SIP

3. Can you tell me that the maximum limit of the SIP amount is there or not?

The limit on the SIP amounts may differ depending on the provider, and the Step-Up SIP Calculator does not set a fixed maximum.

4. How frequent can I increase the SIP?

Our calculator supports only annual top up. Though there are some other calculators that may offer half-yearly top up. Generally, the AMC allows only annual tops

By using the Step-Up SIP Calculator 2024, you can always know how much you can invest every month and see how compounding works to develop a big corpus. Begin without delay and observe the growth of life’s most precious asset – your hard earned money.