What is Step-up SIP?

WHAT IS STEP - UP SIP ? STEP UP YOUR SIP GAME Investors who do not reach their financial objectives often overlook the potential impact of inflation on their plans . To combat this , one should adjust their Systematic Investment Plan ( SIP ) to accommodate the higher costs associated with achieving their goals . By doing so , investors can ensure that they remain on track toward meeting their financial goals . ENTER STEP - UP SIP'S A step - up Systematic Investment Plan ( SIP ) allows investors to increase their monthly SIP amount automatically over time , typically on an annual basis . There are two ways to take advantage of this option . You can increase the amount you invest through SIP on a yearly basis . For instance , you can begin your monthly SIP with an amount of Rs 5,000 and then add Rs 1,000 to it every year . Consequently , in the following five years , your monthly SIP contribution will be 6,000 , 7,000 , You can also increase your SIP ibution amount on a percentage basis every year . For instance , if you have a monthly SIP of Rs 5,000 then it can be raised by 10 % annually . This means that in the next five years your regular payment would be 6,655 and so forth . ADVANTAGES OF STEP - UP SIP SOME KEY BENEFITS OF STEP - UP SIPS INCLUDE 5 10 15 t ₹ SIP Tenure Monthly SIP ( Yrs ) Amount ( * ) Develops a sensible attitude towards money by utilizing increased income for productive investments instead of squandering it . HOW THE SIP STEP - UP WORKS ... 5,000 5,000 5,000 You get an excellent opportunity to attain your financial objectives as the higher SIP amount compensates for the increased cost of items such as education and property . The investor can set up a SIP contribution to increase in tandem with their salary or business income . Assumed Annual Return 12 % 12 % 12 % Total Corpus ( ₹ ) SIP 4,12,432 11,61,695 25,22,880 SIP Step - Up 4,67,705 15,92,416 40,89,122 * Assuming Annual Step - Up of 10 % p.a. ( The is for illustration only , The total corpus amount may vary as per the scheme returns . ) MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS , READ ALL SCHEME RELATED DOCUMENTS CAREFULLY . THE INFORMATION PROVIDED IS GENERIC IN NATURE AND IS FOR INFORMATIONAL PURPOSES ONLY . CONSULT YOUR FINANCIAL ADVISOR BEFORE TAKING ANY DECISION .