In March 2024, the total amount collected by the mutual fund industry through SIP investments amounted to ₹19,271 crore, according to AMFI data. The popularity of SIP investments is at its peak in India, and therefore, investors should look to complement the benefits of SIPs with step-up SIPs. Read on to know more about steppingup your SIP investments.

What is a step-up SIP?

Step-up SIPs help investors gradually increase their SIP (systematic investment plan) contributions towards a mutual fund over time. Step-up SIPs are also called top-up SIPs and you as an investor can use them to increase your periodic SIP contributions by percentage or amount. An online step-up SIP calculator can help you do this by helping you calculate your returns based on the type of step-up youchoose– percentage-based or amount-based.

What are the benefits of stepping-up your investment using a step-up SIP calculator?

Here are the key advantages of stepping-up your SIP investments using a SIP step-up calculator:

• You can capitalise on market opportunities:Increasing your SIP contributions during a conducive market can help you leverage lower prices during market corrections. Therefore, stepping-up your SIPs using a step-up SIP calculator can help you make the most of market opportunities.

• Stepping-up your SIP contributions allows you to align with your financial objectives:Oftentimes, after having invested in a mutual fund for a few years, it is easy for you as an investor to lose track of your original financial objective. Using a step-up SIP calculator can help you re-align your investment with your financial objective by increasing your monthly contributions.

• You can leverage the power of compounding to earn more wealth:The power of compounding works when a fixed income is invested regularly in an investment scheme. However, it works better when you gradually increase your investment amount. Stepping-up your SIPs, therefore, can help you earn higher returns in the long term.

• Step-up SIPs can help you maximise tax benefits:Strategically stepping-up your SIP investments can help you make the most of the tax benefits offered by the Income Tax department. You can maximise your tax benefits by stepping-up your monthly SIP contributions.

• Stepping-up your SIPs is the best way to adapt to changing financial goals:The nature of your financial goals can change over time. In a few years, you might realise that a particular financial goal is worth a lot more than it used to be, a while ago. You can adapt to the changing nature of your financial goals by occasionally stepping-up your SIP investments by using a step-up SIP calculator.
• You can mitigate the impact of inflation by stepping-up your SIPs:Stepping-up your SIPs is a very effective way of countering the impact of inflation on your mutual fund investments.You can ensure that your wealth grows at the rate of inflation or exceeds it by stepping-up your SIPs.

You must consider your investment horizon, investment amount, and your risk appetite before increasing your monthly SIPs using a step-up SIP calculator.