Step-up SIP Value calculator

Know what this step up SIP calculator can do

Helps understand how much wealth can be created if SIPs are regularly stepped up

Calculates final value of investment when SIP amount is steadily increased

Best mutual funds to start your SIPs today

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When you look at how much you should invest towards a particular goal – say, retirement or children’s education – you may be alarmed by the large SIP size sometimes. It may even scare you away from investing altogether! But wealth can always be gradually built. You do not have to invest a high amount right from the get-go – you can start a small SIP and step up SIP slowly.

Most SIP calculators assume a steady SIP amount throughout. However, step-up SIP – where you increase the SIP amount by a fixed percentage each year – is also a very real scenario. The step-up SIP calculator, therefore, is useful for when you want to know how much your SIP can grow if you increase the amount each year.

What is Step-up SIP Calculator and how does it help you?

SIP amounts do not have to be uniform throughout the entirety of your investment. As

your income grows, your investment can and should grow as well! Therefore, when

you’re estimating how much wealth you can build, it would be realistic to assume that you would increase your SIP amount.

The step-up SIP calculator is an advanced version of a normal SIP calculator. It is a SIP calculator with step-up feature in the SIP amount. Using the step-up SIP calculator, you can calculate what your wealth can be if you increase your monthly SIP by a fixed percentage every year.

This calculator with step up SIP is useful in helping you draw a better understanding on how you can build wealth when you increase your savings in line with your income growth. The step up SIP calculator can also help you in other ways. If your current SIP amount is low, using a calculator with step up feature can help you understand how much you may need to slowly increase your SIP so that you meet your goal.

How does the step up SIP calculator work?

This calculator takes the normal SIP calculator up a notch. At its core, it is a SIP calculator with step up SIP factored into the calculation. The step up SIP calculator needs the following inputs:

Monthly SIP investment: This is the amount you plan to save, or you are already saving, every month.
Annual increase: This is the percentage of increase in your SIP amount each year. For example, let’s say your monthly SIP investment is Rs 1,000. If you enter 10% in the annual increase, the second year’s SIP will be Rs 1,100, the third year’s SIP will be Rs 1,210 and so on.
Existing investments: If you have already invested towards the goal for which you are using the step up SIP calculator, enter the current value of this investment here. Otherwise, let the input be zero (0).
SIP duration: The number of years you are planning to run your SIP. Make sure you enter a realistic figure here.
Assumed returns: The returns you expect your investment to generate. In this value, keep in mind that assuming very high returns will be misleading. The actual returns you wind up earning will deviate sharply from your estimate. Therefore, keep your return expectations realistic.

The output of the step up SIP calculator will show you the total amount you would have invested over the course of the period and the final value of your investment.

Benefits of step up SIP calculator

The step up SIP calculator will help you plan your investments in two ways.

One, to give you a more realistic picture of the potential wealth you can build. Given that incomes and lifestyles typically scale up each year, the propensity to save and the wealth you need to create can also step up in tandem. The step up SIP calculator helps you factor in this possible increase in savings towards wealth building.
Two, there may be cases where your current SIP amount seems very low compared to what you should be saving for a goal. The step up SIP calculator helps you calculate by how much you need to increase your SIP, even if you start small, to meet the same goal.

Remember always that the output shown in the step up SIP calculator are based on estimates. Your actual wealth will depend on the return your investments generate and your monthly investments. Therefore, always track your investments to ensure your portfolio keeps up with your requirements. Our Portfolio Review Pro tool is a great way to maintain your portfolio in top shape.

How to use PrimeInvestor Step Up SIP Calculator

The step up SIP calculator takes the concept of a normal SIP calculator but factors in the ability to increase SIP amounts steadily. This calculator is useful when you want to build in the probability that your monthly SIP amount will scale up over time.

To use the step up SIP calculator, all you need to do is tell it your initial investment, annual increase rate, current savings, investment duration, and expected return. It calculates the total amount you’ll invest through the step up SIP and the final value of the investments. This SIP calculator with step up helps with financial planning by showing how much wealth you can build with increasing savings potential, and demonstrating how much to raise your SIP to reach your goals, even when starting small.

FAQ

Why is step up necessary?

Income earned, typically, rises each year. As this increases, your savings should also rise in tandem. This step up SIP will ensure that you keep your spending within reason and will direct you towards better wealth creation than if you stayed with a flat SIP amount. This is especially true when you begin investing early in your career when your income levels may not be high, or when you may pay off large debt and find yourself with a higher income. The step up SIP calculator serves as a guide to understand how even small step up in SIP, when done consistently, can positively impact your wealth.

How is step up SIP different from the conventional SIP?

A conventional SIP assumes a flat investment amount each month throughout the SIP period. On the other hand, a step up SIP considers the fact that SIP amounts can increase. The increase can be in rupee terms or in percentage terms. The PrimeInvestor step up SIP calculator assumes a percentage increases. A conventional u003ca href=u0022https://www.primeinvestor.in/calculators/sip-value-calculator/u0022u003eSIP value calculator u003c/au003etherefore, is a more straightforward guide to understanding wealth building potential of your investments compared to a SIP calculator with step up feature.

When can I start the step-up SIP?

There is no right or wrong time to start a step up SIP. It’s always a good time to invest! You should start a SIP as soon as you have some income to save up. The SIP amount does not have to be high – you can start small. You can start the step up SIP when your income is stable and begins to grow. The step up SIP also can be within what is feasible for you; there is no rule on how much you need to increase the step up SIP. The key is to gradually increase your SIP amount so that you are better able to reach your financial goals.

What are the different types of SIPs?

There areu003ca href=u0022https://www.tatamutualfund.com/blogs/what-are-the-types-of-sips-available-and-how-are-sip-returns-calculatedu0022u003e multiple variations of a conventional SIPu003c/au003e. Ensure that you understand what each variation involves before opting for that type of SIP.u003cbru003eu003cbru003eu003cstrongu003eFlexible SIP u003c/strongu003e- A flexible SIP is where you can change the amount being invested every month. This can help when your income stream fluctuates from month to month which makes it difficult to commit to a fixed sum in your SIP. It can also help informed investors who wish to take calls based on market levels, and invest more when the markets are falling and lower when markets are at highs.u003cbru003eu003cbru003eu003cstrongu003eStep up SIP u003c/strongu003e- Step up SIP allows you to increase the SIP amount after regular intervals. For instance, you can start investing with Rs. 20,000 and instruct an increase in the SIP amount by Rs. 2,000 after every six months. So for the first six months you invest Rs 20,000 and after six months you invest Rs 22,000, and Rs 24,000 after that and so on. This ensures that your SIP increases as your income increases, so that your wealth creation stays in line with your changing lifestyle. You can also choose to step up your SIP in percentage terms.u003cbru003eu003cbru003eu003cstrongu003ePerpetual SIP u003c/strongu003e– The SIP mandate requires an investor to fill the start date and the end date or the time of the maturing of the SIP. If the investor fills only the start date and does not mention the end date of the SIP then such an SIP becomes a perpetual SIP. Perpetual SIPs help ensure that you do not forget to renew a SIP once it ends. You can, of course, stop the SIP at any point.u003cbru003eu003cbru003eu003cstrongu003eTrigger SIP u003c/strongu003e- In a trigger SIP, an investor sets a trigger, such as market levels or fund NAV levels/ returns. When this trigger is met, the SIP amount is deployed into the funds. Until the trigger is invoked, the SIP is not invested. In Trigger SIPs, the date of the SIP will depend on the trigger and you may not have regular investments either. A trigger SIP is useful for more discerning or informed investor.

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