Question 1

What is a Step-Up SIP?

Accepted Answer

A Step-Up SIP (also called Top-Up SIP) is a SIP where the monthly contribution increases by a fixed percentage every year. A 10% step-up on ₹10,000 means ₹11,000 in year 2, ₹12,100 in year 3, and so on. It mirrors how Indian salaries typically grow.

Question 2

How much extra wealth does a Step-Up SIP create?

Accepted Answer

Over 20 years at 12% return, a flat ₹10,000 SIP grows to ~₹99 lakh. The same SIP with a 10% annual step-up grows to ~₹2.16 crore — more than double the corpus, despite contributing only ~₹68 lakh of principal vs ₹24 lakh in the flat case.

Question 3

What step-up percentage should I pick?

Accepted Answer

Match it to your expected annual salary increment. Most Indian professionals get 8–12% raises in normal years, so 10% is a reasonable default. If you're early career and expect faster increases, set it higher.

Question 4

Is Step-Up SIP available for every fund?

Accepted Answer

Yes — most AMCs let you set a fixed annual step-up amount or percentage at SIP registration. If your existing SIP doesn't have it, just register a new SIP at the higher amount each year.

Question 5

Are step-up amounts tax-deductible?

Accepted Answer

Only if the underlying fund is ELSS — then 80C applies (subject to the ₹1.5 lakh annual cap). Other equity funds don't offer 80C.

Step-Up SIP Calculator

Wealth growth — step-up SIP

The step-up advantage in numbers

Frequently Asked Questions