Why Step-Up SIP is a Game Changer
- Aligns with income: Your investment grows as your salary grows
- Beats inflation: Your real investment power increases each year
- Easier to start: Begin with what you can afford, increase gradually
- Maximizes compounding: Higher amounts in later years compound more
- Automatic discipline: No need to remember to increase manually
When Regular SIP is Better
Step-up isn't always the answer. Stick with regular SIP if:
- You're on fixed income (pension, stable job with no hikes)
- You're already investing at your maximum capacity
- Your goal is short-term (under 5 years)
- You prefer predictable, unchanging outflows
Frequently Asked Questions
How do I set up step-up SIP?
Most AMCs and platforms (Groww, Zerodha, Kuvera) offer step-up SIP option. While registering SIP, select "Top-up" or "Step-up" and enter the annual increase percentage. It's automatic after that.
What's the ideal step-up percentage?
10% is the sweet spot for most people - it matches average salary hikes and doesn't strain your budget. If you get 15%+ hikes regularly, go for 15% step-up. Conservative? Choose 5%.
Can I change step-up percentage later?
Yes, you can modify or cancel the step-up instruction anytime. If your financial situation changes, adjust accordingly. Some platforms let you skip a year's step-up too.
Does step-up SIP have any disadvantages?
The main risk is overcommitting. If you lose your job or face salary cuts, higher SIP amounts become burdensome. Always keep 3-6 months buffer and don't step-up beyond what you can sustain in worst case.