Step-Up SIP Calculator with Lumpsum Investment
| Year | Total Invested (₹) | Maturity Value (₹) | Inflation-Adjusted Value (₹) |
|---|
Understanding Step-Up SIP with Lumpsum
A Step-Up SIP allows investors to increase their monthly contributions periodically, ensuring better capital growth. It helps counter inflation and maximizes wealth accumulation through compounding.
Step-Up SIP Example Calculation
| Parameter | Value |
|---|---|
| Lumpsum Investment | ₹50,000 |
| Monthly SIP | ₹5,000 |
| Annual Step-Up | 10% |
| Expected Return (p.a.) | 12% |
| Inflation Rate (p.a.) | 6% |
| Tenure | 10 years |
Formula for Step-Up SIP Calculation
The maturity amount is calculated as:
Future Value (FV) = Lumpsum FV + Step-Up SIP FV
Where,
- Lumpsum FV = P × (1 + r)^n
- Step-Up SIP FV = SIP × [(1 + r)^n – 1] / r × (1 + r)
How to Use the Step-Up SIP Calculator?
Follow these simple steps:
- Enter the initial lumpsum investment (optional).
- Provide the monthly SIP amount.
- Set the annual step-up percentage.
- Input the expected return rate.
- (Optional) Enter the inflation rate to see real returns.
- Select the investment tenure and click “Calculate”.
Investment Growth Over 10 Years
| Year | Monthly SIP (₹) | Annual SIP Contribution (₹) | Future Value at Year End (₹) |
|---|---|---|---|
| 1 | 5,000 | 60,000 | 67,392 |
| 2 | 5,500 | 66,000 | 1,47,000 |
| 3 | 6,050 | 72,600 | 2,41,205 |
| 4 | 6,655 | 79,860 | 3,51,635 |
| 5 | 7,321 | 87,852 | 4,80,112 |
| 6 | 8,053 | 96,636 | 6,28,675 |
| 7 | 8,858 | 1,06,296 | 7,99,564 |
| 8 | 9,744 | 1,16,928 | 9,95,270 |
| 9 | 10,718 | 1,28,616 | 12,18,541 |
| 10 | 11,790 | 1,41,480 | 14,72,404 |
Adjusting for Inflation
The real value of your investment after adjusting for inflation is:
Real FV = Total FV / (1 + Inflation Rate)^n
For example, if your future value is ₹15,00,000 after 10 years, the real value today would be:
₹8,37,928.96 (assuming 6% inflation).
FAQs on Step-Up SIP
1. Can Step-Up SIP beat inflation?
Yes, by increasing your investment every year, Step-Up SIP ensures that your wealth grows at a rate that counteracts inflation.
2. Is Step-Up SIP better than a fixed SIP?
Yes, a Step-Up SIP allows flexible investments aligned with income growth, leading to a bigger corpus than a fixed SIP.
3. What is the ideal annual step-up percentage?
A 10-15% annual increase is recommended to match salary growth and inflation.
4. Does Step-Up SIP guarantee higher returns?
Returns depend on market performance, but increasing contributions enhances the compounding effect.
5. Can I modify or stop my Step-Up SIP?
Yes, you can modify or stop the SIP anytime based on your financial needs.