Step Up SIP Calculator
“Step Up SIP Calculator” Step up SIP refers to increasing your normal SIP amount periodically after six months or one year. Let’s take a closer insight with the help of an example: Your SIP amount is Rs. 2000, and next year, your salary is increased, and you want to increase your SIP amount to gain some more profit, so you have the option to advance your SIP amount according to your budget, let’s say you grew Rs. 500. Next year, again increased your SIP amount Rs. 500, and your total SIP amount became now Rs. 3000. And you will gain your profit according to this new amount. To calculate your step-up SIP, put your details into the following step-up SIP calculator.
Step-up SIP calculator enable you to calculate your SIP amount according to your step-up SIP amount. Normally, the good expected return rate lies between 10% and 15%. But with the help of step-up SIP, you can earn your desired profit amount before the time.
What is Step-Up SIP?
Step-up SIP is the way to invest the SIP(Systematic Investment Plan) amount in mutual funds, and it refers to increasing your SIP amount periodically after predefined intervals (mostly after one year). Use the step-up SIP calculator when you calculate your ongoing step-up SIP amount. With the help of Step-Up SIP calculator, you can calculate your step-up SIP amount even before starting to invest in mutual funds.
Suppose you are thinking about your low salary. In that case, SIP, which is the Systematic Investment Plan, is the best option for you to start with a low amount like Rs. 500 per month, and here is the charm: you can increase this amount anytime you want, like when you get promoted, you may increase your SIP amount to 10% and then increase this amount periodically for the next five months. In this way, you will not face any burden, and the process is totally automatic. Every year, your SIP amount will automatically be increased by 10%.
By following this pattern, you will automatically buy more units when the prices are low and fewer units when the prices are high. You do not have to take any worries, and the whole process is automatically managed by an expert team who have a lot of experience in this field.
How Step-Up SIP Calculator Work?
You can easily step up your SIP amount by any percentage(most people increase 10% per year), and accordingly, you will achieve your increased profits in a short time. You also have the option to increase the investment duration. Step-Up SIP calculator work in the same way as the SIP Calculator do. There is only one addition of one thing in the whole process, which is that you can increase your SIP percentage.
Let’s take an example to make you better understand Step-Up SIP and the Step-Up SIP calculator.
Below is the table showing Step-Up SIP amount calculations for the next five years with a SIP amount of Rs. 10,000.
| Year | SIP Amount | Step-Up SIP % | Step-Up SIP Amount |
|---|---|---|---|
| Year 1 | 10,000 | 10% | 1000 |
| Year 2 | 11,000 | 10% | 1100 |
| Year 3 | 12,100 | 10% | 1210 |
| Year 4 | 12,320 | 10% | 1232 |
| Year 5 | 13552 | 10% | 1355.2 |
| Year 6 | 14,907.2 | 10% |
As you can see above that, if you start your SIP investment from Rs. 10,000 and gradually increase it to 10% every year, then by the end of 5 years, your step-up SIP amount will be Rs. 14,907.2. This is the amount you are paying for the 6th year. This periodically increasing SIP amount approach is referred to as Step-up SIP. You can calculate this amount easily via the Step-Up SIP Calculator.
If you are not using step-up SIP, then you would still be paying Rs. 10,000, which will buy fewer mutual funds units as compared to now when you are buying more units with this gradually increased SIP amount. In this way, you can get more benefits and more profits.
Benefits of SIP Calculator
The benefits of the Step Up SIP calculator are mentioned below:
Is Step-Up SIP Calculator Better than Simple SIP?
Regular SIPs do not provide you with earning chances as the Step-Up SIP does. By investing in SIP, you are just receiving your decided SIP profit and do not have access to buy more units at low prices. If you choose step-up SIP, then you can gradually get more and more mutual funds SIP units, and you do not have to make much effort to do so; start, and then the professional team will handle your SIP amounts. They will automate your SIP account, and then every year, your investment will be increased automatically, as you can see in the above example.
Step-up SIP calculator help you comprehend the estimated SIP maturity amount by the end of your investment duration. To use a step-up SIP calculator is simple; follow the simple steps in the next section.
How to Use Step-Up SIP Calculator?
Using a Step-up SIP (Systematic Investment Plan) Calculator involves some simple steps. Follow the steps below to start using the step-up SIP calculator.
Step 01: Open the Calculator.
Step 02: Enter the initial SIP investment amount. This is the amount you are willing to pay from day one, and you have the option to increase it as per your budget.
Step 03: Now put the SIP investment frequency. Normal SIP frequencies are monthly, quarterly, or semi-annually. The SIP duration depends upon everyone’s financial planning.
Step 04: Now put your total SIP investment duration, which may vary for different people’s preferences. In the above example, the investment duration was taken five years.
Step 05: Now select your step-up SIP increment; this amount may be increased annually or after six months. In the example explained in the above section, a step-up increment, which was 10 percent, was chosen annually.
By entering all the above details, you will see your total profit SIP amount, real return rate, total invested amount, and total maturity amount. It also provides you with a breakdown of investment over time. To ensure your financial alignment, you must consult your financial advisor. It is always a good practice to seek guidance from experts before calculating such crucial financial insights.
Stay independent on step-up SIP calculator. This is a tool, and the actual return results may vary based on any reason. So, always comprehend the financial strategies if possible, seek guidance from experts, and regularly review your investment strategy.
Annual Step-Up SIP
Annual step-up SIP refers to an investment strategy in which an investor can increase their investment amount after every year of their SIP investment durations, which may vary from investor to investor.
This kind of investment scheme is beneficial for people when their salaries or income increase after some years of their SIP duration. Annual step-up SIP is also helpful for those who are newbies, have little experience in the investment field, and want to earn some maturity to fulfill their requirements. If they get the benefits, then they can step up their investment at any time.
Advantages of Step-Up SIP
As a step-up, SIP is more user-friendly and can lead you to make more profits from mutual funds. So, let’s discuss some advantages of Step-Up SIP over normal SIP.
Increased Saving Potential
Step-up SIP can help investors gradually increase their investment amount over the years. So that they can add more investment amounts each year and ultimately buy more mutual funds SIP units during times of low unit prices. This increased saving potential approach can help investors save more money and buy more units for a greater maturity amount.
Flexibility
Step-up SIP enables investors to increase their investment amount according to their evolving financial status. Such flexibility allows the users to have better financial management and prevent financial strains.
Power of compounding
Step-Up SIP increases the investment amount gradually, and this will capitalize on the power of compounding. The compounding occurs not only in the initial investment amount but also increases due to increasing investment amount.
Long-term Goals
Step-up SIP is beneficial for inventors looking for long-term investment methods. Whether you are investing for your child’s education, home ownership, or some other reasons, step-up SIP is the best match for your long-term investment aspirations.
Can I use Step-Up SIP over an existing SIP?
Yes, if you already have a SIP (Systematic Investment Plan), you can apply for the step-up SIP plan, which is more reliable and beneficial. Step-Up SIP involves the gradual, periodic increase in SIP investments. This is the investment scheme that suits people with changing financial circumstances or people who want to make more profits.
Doing Step-Up SIP on your existing SIP can be advantageous for you by the following points:
Share this Step-Up SIP Calculator with your family and friends to help them make more SIP returns.