Methodology
Step-up SIP Calculator Methodology
How a step-up SIP (annual increment SIP) future value is computed by treating each year as its own SIP at the stepped-up amount.
By Yadav PatleLast updated:
Formula
FV = Σ (P × (1 + s)^(y-1)) × ((1 + r)^12 − 1) / r × (1 + r) × (1 + r/12)^((Y-y)×12)
Variables
| Symbol | Name | Description |
|---|---|---|
| P | Initial monthly contribution | The starting monthly SIP amount in year 1. |
| s | Annual step-up rate | Percentage by which the monthly amount increases every year (e.g. 10%). |
| r | Monthly rate | Annual return ÷ 12 ÷ 100. |
| y | Year index | Iterates from 1 to Y. |
| Y | Total years | Total investment horizon. |
Worked example
₹10,000 starting SIP, 10% annual step-up, 20 years at 12% return → final corpus ≈ ₹1.61 crore (versus ₹98 lakh for a flat ₹10,000 SIP over the same period). The step-up adds ~₹63 lakh.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- The step-up applies on each contribution anniversary and remains constant for the year.
- Same return, expense, and tax assumptions as the standard SIP calculator.
- You can sustain the higher contribution every year. The calculator does not test affordability against income.
Authoritative sources
Where the formula, rates, or framework come from:
Try it now
Plug in your own numbers in the Step-up SIP Calculator and see the formula applied in real time.
This methodology page is for educational purposes only. Calculations are estimates; real-world results vary with taxes, fees, expense ratios, and market conditions. Yadav Patle is not a SEBI-registered investment adviser. For personalised advice, consult a registered adviser.