Step-Up SIP Calculator
Your SIP will increase by this percentage at the start of each year.
💼 Invested Amount: ₹0
📈 Est. Returns: ₹0
💰 Total Value: ₹0
Step-Up SIP Calculator
Concept:
A Step-Up SIP Calculator helps you estimate wealth when your monthly SIP increases every year (e.g., by 5–10%). This mirrors career growth and salary hikes, making investments more realistic and progressive over time.
A Step-Up SIP Calculator helps you estimate wealth when your monthly SIP increases every year (e.g., by 5–10%). This mirrors career growth and salary hikes, making investments more realistic and progressive over time.
Formula
FV = P * ( ((1 + r)^n – (1 + g)^n) / (r – g) )
FV = P * ( ((1 + r)^n – (1 + g)^n) / (r – g) )
Where:
- FV = Future Value of the investment
- P = Initial monthly SIP amount
- r = Monthly rate of return (Annual Return ÷ 12 ÷ 100)
- g = Monthly equivalent of annual SIP increment (e.g., 10% annual ≈ 0.10 / 12)
- n = Total number of months
Step-by-Step Manual Formulas
Step 1. Convert annual return to monthly return:
r = Annual_Return / (12 * 100)
Step 2. Convert annual SIP increment to monthly equivalent:
g = Annual_Increment / (12 * 100)
Step 3. Compute growth factor of returns:
Factor_r = (1 + r)^n
Step 4. Compute growth factor of SIP increments:
Factor_g = (1 + g)^n
Step 5. Apply step-up SIP formula:
FV = P * ( (Factor_r – Factor_g) / (r – g) )
Theory in Simple Words
- Unlike a normal SIP (fixed amount), Step-Up SIPs increase yearly, aligning with
income growth. - The formula balances investment growth (r) with contribution growth (g).
- If g = 0, the formula simplifies back to the regular SIP formula.
- Step-Up SIPs accelerate wealth creation without burdening current income.