A SIP that increases by a fixed percentage each year, compared against the same SIP left flat.
| Year | Invested so far | Value |
|---|---|---|
| 1 | ₹60,000 | ₹64,047 |
| 2 | ₹1,26,000 | ₹1,42,621 |
| 3 | ₹1,98,600 | ₹2,38,205 |
| 4 | ₹2,78,460 | ₹3,53,661 |
| 5 | ₹3,66,306 | ₹4,92,285 |
| 6 | ₹4,62,937 | ₹6,57,867 |
| 7 | ₹5,69,230 | ₹8,54,764 |
| 8 | ₹6,86,153 | ₹10,87,978 |
| 9 | ₹8,14,769 | ₹13,63,250 |
| 10 | ₹9,56,245 | ₹16,87,163 |
A flat SIP quietly shrinks in real terms: the same amount buys less each year as your income and prices both rise. Raising the instalment by roughly the rate your income grows keeps the commitment constant in real terms, and because the increases arrive early enough to compound, the ending value moves far more than the extra money put in would suggest.
Most people set the step to their expected annual increment. A 10% step on a 10-year SIP means the last year's instalment is about two and a third times the first year's.
The return is an assumption, real returns are uneven, and costs and taxes are not included.
Every figure above rests on a rate you chose. These pages use the prices that really occurred.
Not investment advice — read the disclaimer.