{"id":16148,"date":"2019-09-03T12:08:27","date_gmt":"2019-09-03T06:38:27","guid":{"rendered":"https:\/\/www.fundsindia.com\/blog\/?p=16148"},"modified":"2025-04-23T12:32:21","modified_gmt":"2025-04-23T07:02:21","slug":"fundsindia-explains-step-up-sip","status":"publish","type":"post","link":"https:\/\/www.fundsindia.com\/blog\/mf-basics\/fundsindia-explains-step-up-sip\/16148","title":{"rendered":"FundsIndia Explains: Step-up SIP"},"content":{"rendered":"

\u201cWe don\u2019t have to be smarter than the rest. We have to be more disciplined than the rest.\u201d<\/strong><\/p>\n

-Warren Buffet<\/span><\/p>\n

Systematic Investment Plans (SIPs)<\/a> are a godsend for investors who don\u2019t have the time or technical know-how. It’s a gateway for them to enter the market sans the added pressure of making tough decisions about the timing of buying\/selling stocks, thanks to rupee cost averaging. What\u2019s more, it holds you in good stead to beat inflation. This is because your wealth is not just being saved. It is growing at a rate that is potentially much higher than current inflation rates. In the long run, If you\u2019re a disciplined investor in equity funds<\/a>, you can be confident of sitting pretty atop a substantial corpus when it\u2019s time to retire.\u00a0<\/span><\/p>\n

However, a lot of investors take the concept of \u2018passive investing\u2019 to a whole new level. Their SIP amounts get set in stone for years together. While they would have been awarded appraisals and salary hikes over the years, their SIP is seldom extended a similar favour.\u00a0<\/span><\/p>\n

What?<\/b><\/h4>\n

Step-up SIP<\/a>, also called a \u2018Top-up SIP\u2019, is a handy solution through which your monthly contribution can be augmented by a predetermined fixed amount, or a fixed percentage, at recurrent intervals (half-yearly or annual) in line with your income level and financial goals. You can set sights on the final goal amount and work your way towards it, while gradually increasing your SIP amount.\u00a0<\/span><\/p>\n

What are its advantages over your run-of-the-mill SIP, you ask? Well, the differences are quite stark. See for yourself!<\/span><\/p>\n

Why?<\/b><\/h4>\n

Below is an analysis of 4 scenarios over a period of 10 and 20 years to depict how your investments would\u2019ve grown in a step-up SIP as compared to a regular one:<\/span><\/p>\n