10/4/2023 0 Comments Fincalc calculatorOther difference is the increase in profits that you make in step up SIP which is a by product of increase in Step up SIP amounts.īelow is the video showing you the SIP vs top up SIP with some numbers in excel: Difference between SIP and Step up SIP?Īs seen in above example, the only example is increase in SIP amount every year in step up SIP option. 5,000 per month even after 5 years by not thinking about step up SIP, and all your income increments every year must have gone in your expenses, if not in other investment options. This gradual increase in SIP amount will help you buy more mutual fund units and get more returns via SIP.Ĭompared to conventional SIP, you must be still investing Rs. 8,053 will be your SIP amount in 6th year after you increase SIP amount every year by 10% starting with Rs. 6050 and so on.īelow is the table showing Step up SIP amounts for first 5 years starting with SIP = Rs. In third year, 10% increase will be done of SIP of Rs.5000, and SIP amount in second year will be Rs. So, in 2nd year, your 10% increase will be done on existing SIP of Rs.And after a year you want to increase sip amount by 10% every year for next 5 years.Let’s say you want to start with SIP = Rs.Below are the steps to calculate step up SIP amount: Step up SIP calculation is similar to SIP calculation, but with the only factor of increasing the SIP amount every year. This keeping aside of additional amount as investment in step up SIP will help you achieve your goals faster with less stress since the additional amount you added in SIP is affordable and is a percentage from your income increase amount. And by doing step up SIP, you keep aside additional amount as investment when you get yearly salary increments or promotions compared to your increase in expenses after lifestyle change due to such events. This will help you to keep your SIP active and also to get more benefits in terms of mutual fund returns by increasing the SIP amount every year.Īs mentioned above, SIP is beneficial due to it’s benefit of Rupee cost averaging, where you buy less units when market goes down and more units when market goes up. For example, if your salary increases by 10% in a year due to yearly increment in salary, it is good option to increase your SIP amount of Rs. It is important to note that you can easily set the percentage of step up ( the amount by which you want to increase SIP amount) and accordingly you’ll get the benefits of step up SIP. With the increase in income, your expenses also tend to increase with lifestyle change, and step up SIP is a way to keep up with your investments as well, when there is an increase in income. It is a good way to invest in mutual funds when you know your income is going to increase every month. Step up SIP helps you to increase your SIP investment amount automatically when you get yearly salary increments or promotions or bonuses. Why Step up SIP is important and how it is useful to you? Usually the frequency of step up in SIP is every year and you get the chance to automate the process of increasing your SIP amounts every year with the help of automation provided by many mutual funds. Step up SIP is a way to invest your hard earned money regularly, similar to SIP (Systematic Investment Plan) but with an increase in SIP amount every year or quarter. How Step up SIP Calculator will help you?.Difference between SIP and Step up SIP?.Why Step up SIP is important and how it is useful to you?.Download our Android App FinCalC to see Slab-wise details of your Income Tax Calculation.Download Step up SIP EXCEL Calculator from here.
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