SIP Vs Step-Up SIP: How Different Is The Journey To Your First Rs 1 Crore?

Step-up SIP can be a more effective option over SIP as it helps you reach a financial target within a shorter duration by consistently increasing investments.

Compared to fixed deposits (FDs), SIPs often offer more attractive returns, making them a popular choice for long-term wealth creation. 


Investors seeking higher returns from investments in equities and equity-related instruments, without direct exposure to market risks, could explore the option of mutual funds. If you want to build wealth with regular investment of small amounts every month, a systematic investment plan (SIP) could be more suitable. SIPs help you diversify and grow your money over time through the power of compounding.

Compared to fixed deposits (FDs), SIPs often offer more attractive returns, making them a popular choice for long-term wealth creation. 

To enhance your savings, financial experts also recommend a simple add-on technique called ‘step-up SIP’, which can boost your returns further. With step-up SIP, you gradually increase your monthly investment amount at fixed intervals, usually in line with your income growth. 

This technique allows your investments to compound faster. By this technique, you can build a larger corpus without putting too much pressure on your finances.

Step-up SIP can be a more effective option over SIP as it helps you reach a financial target within a shorter tenure. Under a step-up SIP scheme, the mutual fund houses allow increasing your investments in an existing plan at regular intervals. So, a consistent hike in investments gradually reduces the tenure to reach your financial target.

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SIP Vs Step-up SIP: How To Reach Your First Rs 1 Crore Goal

Let’s take an example of investing a modest amount of Rs 15 thousand per month in an SIP, with an estimated return of 12% per annum.

Here’s how your investment will grow to Rs 1 crore:

Rs 15,000 Monthly SIP:

Returns: 12% p.a.

Target: Rs 1 crore

Time required: 18 years

Total investment: Rs 32.4 lakh

Estimated returns: Rs 74.36 lakh

Final corpus: Rs 1.07 crore

Rs 15,000 Monthly Step-Up SIP:

Now let’s calculate the potential growth path for the same investment through a step-up SIP.   

Returns: 12% p.a.

Target: Rs 1 crore

Step up investment (annual): 10%

Time required: 14 years

Total investment: Rs 50.35 lakh

Estimated returns: Rs 58.76 lakh

Final corpus: Rs 1,09,12,184

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The investment horizon to reach your Rs 1 crore corpus may vary, depending on the amount you invest and the potential annual returns.

As seen from the given example, the step-up SIP technique helps to achieve the same target much earlier than simple SIPs. This technique also introduces increased financial discipline among investors, encouraging them to align their investment habits with their growing income.

For a more realistic view, investors should consider using an inflation calculator. This allows evaluating the impact of rising costs and maintaining purchasing power, giving a better understanding of your financial goals. It is also important to take into account your financial position and risk tolerance capabilities before investing in mutual fund SIPs.

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