How it's calculated
A step-up SIP (also called a top-up SIP) raises the monthly instalment once a year, either by a percentage or by a fixed amount. The calculator keeps the instalment the same for 12 months, raises it, and repeats, investing each instalment at the start of its month and growing it at the expected return ÷ 12 per month. It then compares the result with a SIP that never steps up.
This matches AMFI's step-up SIP calculator: for ₹5,000 a month rising 10% a year for 10 years at 12%, AMFI shows ₹9,56,245 invested and a value of ₹16,87,163.AMFI The calculator gives ₹9,56,245 and ₹16,87,163.
The formula
For year k (k = 0 for the first year), the instalment is P × (1 + s)k with a percentage step-up s, or P + k × A with a fixed step-up A. Each year's 12 instalments are worth Pk × ((1 + i)12 − 1) ÷ i × (1 + i) at the end of that year, and then keep growing at (1 + i)12 a year until the end:
Future value = Σ Pk × ((1 + i)12 − 1) ÷ i × (1 + i) × (1 + i)12 × (years − 1 − k), with i = annual return ÷ 12.
Worked example
Starting at ₹10,000 a month and raising it 10% every year for 10 years at 12%, the SIP grows to ₹33,74,326. Without the step-up it would reach ₹23,23,391, so the step-up adds ₹10,50,936. By year 10 the instalment is ₹23,579 a month.
| Line | Amount |
|---|---|
| Amount invested | ₹19,12,491 |
| Estimated gains at 12% a year | ₹14,61,835 |
| Estimated value | ₹33,74,326 |
| Value without the step-up | ₹23,23,391 |
A fixed step-up of ₹1,000 a year instead gives ₹31,45,356.
Assumptions and limitations
- A constant return every year; mutual fund returns vary and are not guaranteed.
- The step-up happens every 12 instalments. Fund houses let you choose the step-up frequency and often a cap on the instalment, which the calculator does not apply.
- Before tax and exit loads, with no withdrawals.