Rs 14,000 SIP vs Rs 10,000 Step-up SIP: Which can generate a higher corpus in 10,20 & 30 years?

You may be familiar with SIPs (Systematic Investment Plans), a method that lets you invest a fixed amount in mutual funds regularly. Now, imagine being able to increase those investments over time. That’s where Step-up SIP comes in. With Step Up, you can increase your investment by a fixed percentage or amount at regular intervals. On that note, let’s compare Rs 14,000 SIP and Rs 10,000 Step-up SIP to find out which one can build a higher corpus in 10, 20, and 30 years.

A Step-up in a Systematic Investment Plan (SIP) allows you to increase your investment contributions by automatically increasing them by a fixed amount or percentage at regular intervals, helping you grow your wealth over time.

With a regular SIP, you invest a fixed amount every month, which remains constant throughout. In contrast, a Step-up SIP allows you to increase your investment amount annually by a specified percentage or fixed amount. While regular SIPs are easy to budget for, Step-up SIPs require slightly more planning to accommodate the annual increments.

For example, if you start a monthly SIP of Rs 10,000, you can opt to increase the amount by 5 per cent or 10 per cent after a year, resulting in a Rs 500 or Rs 1,000 increase in your SIP amount.

Consider a regular SIP if:
You are new to investing and want a simple, consistent plan.
Your income is fixed and won’t increase anytime soon.
You prefer a straightforward, hassle-free investment approach.

Consider a Step-up SIP if:
You expect regular income hikes (like annual salary increases).
You are planning for long-term goals that will need more money over time.
You want to supercharge your savings with increasing contributions.

We will assume a 12 per cent annualised return with a monthly investment amount of Rs 14,000 for 30 years.

In 10 years, the investment amount will be Rs 16,80,000, the estimated capital gains will be Rs 14,56,502, and the estimated retirement corpus will be Rs 31,36,502.

In 20 years, the investment amount will be Rs 33,60,000, the estimated capital gains will be Rs 95,18,003, and the estimated retirement corpus will be Rs 1,28,78,003.

In 30 years, the investment amount will be Rs 50,40,000, the estimated capital gains will be Rs 3,80,93,625, and the estimated retirement corpus will be Rs 4,31,33,625.

We will do the calculations at a 12 per cent annualised return and an annual step of 8 per cent.

In 10 years, the investment amount will be Rs 17,38,388, the estimated capital gains will be Rs 12,83,836, and the estimated retirement corpus will be Rs 30,22,223.

In 20 years, the investment amount will be Rs 54,91,436, the estimated capital gains will be Rs 1,04,19,885, and the estimated retirement corpus will be Rs 1,59,11,320.

In 30 years, the investment amount will be Rs 1,35,93,985, the estimated capital gains will be Rs 4,99,10,613, and the estimated retirement corpus will be Rs 6,35,04,599.