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Step-up SIP – What is it and how does it Work?

Written by - Akshatha Sajumon

January 12, 2022 7 minutes

SIPs have become a very common term in our day-to-day life. It is a mode of investment in mutual funds that allows the investor to make investments in small amounts at fixed intervals. There are many types of SIPs where the investors can increase or decrease their investment at their discretion. One of the many types of SIPs available for investors is the step-up SIP. Read on to know more.

What is a step-up SIP?

As mentioned above, SIP lets the investor invest a fixed sum of money in mutual funds at fixed intervals in a disciplined manner as against the lump sum mode of investment where the investor is required to invest a huge amount of money in a single payment. Step up SIPs on the other hand allow the investor to increase their SIP amount in fixed intervals by a fixed amount or a percentage at the discretion of the investor. This is an ideal mode for increasing the mutual fund investment which can correspond to their increased income. This helps them reach their investment goals at a faster pace without creating an additional burden on their finances. 

Benefits of step-up SIP?

Step up SIPs have many benefits for the investors that make it an attractive investment mode. Some of such benefits are highlighted below.

a. Convenience

Step-up SIPs are an increase in the SIP amount of the existing SIPs of the investor. This removes the hassles of analyzing new investment options. Investors can simply increase their existing investments and get the benefit of higher returns.

b. Helps in matching the increased income with an increase in investment

The income of the investor keeps increasing over time. Most often this increased income does not always translate into an increase in savings or investment and is spent away. This ensures that the investor gets the benefit of increased returns as well as a disciplined approach to investment.

c. Increases the corpus fund

It helps the investor increase their corpus fund at a faster pace and thus helps them meet their financial goals sooner. 

d. Helps in beating the inflation 

The inflation in the country is ever increasing. The value of the investment will therefore decrease over time. With step-up investment, investors will be able to beat inflation and get increased returns on increasing investment.

If you are wondering about how much returns could you get from a Step Up SIP you can make use of our easy to use Step Up SIP Calculator and play around with different percentages of annual increments or change the duration to see how much returns could a Step Up SIP investment get you?  

Who are the target investors for step-up SIP?

SIPs are a very good investment option for every category of investors. It helps the investors gradually build their investment portfolio to meet their investment goals and to ensure that the steady investment does not put a burden on their pocket too. Step-up SIP further helps the investors match their income and savings and is ideal for investors with other obligations that can be met along with their increasing savings. 

What is the process for step-up SIP?

The process of setting up a step-up SIP is similar to starting a conventional SIP. The investors should analyze the SIPs in their portfolio and opt for step-up SIPs for investments that match their risk profile, their investment goals, and returns expectations.

Another important factor in setting the step-up SIP is determining the amount and the mode of increase in SIP whether through a fixed amount or based on a percentage. This is an important decision to ensure that the increased SIP does not become a burden to the investor. 

Apart from this, most funds also allow the investors to limit their SIPs per month. Once the set limit is reached the SIP will be converted to regular SIP. The option to start a step-up SIP has to be selected at the time of initiating the SIP and to stop the SIP, the investors will have to close the existing SIP. a new regular SIP can be started in its place if opted by the investor.

How to set-up a Step-Up SIP on Fisdom ?

The facility to set up a Step-Up SIP is not yet available on FInity App, but you can do so offline by sending a mail to with the fund name and the increase in amount that you are looking at every month. 

What is the difference between regular SIP and step up SIP?

The main difference between the regular SIP and the step-up SIP is the increase in the corpus fund in absolute terms. It helps the investor beat inflation on account of increased returns. However, it is to be noted that although the absolute returns in the case of step-up SIPs are more, the wealth ratio (i.e., the ratio of incremental wealth generated to the final corpus) is higher in the case of regular SIPs. This is on account of the simple fact that the higher amount of step-up SIPs gets lower tenure for compounding as compared to a steady regular SIP amount. 

Things to keep in mind before starting a Step-up SIP

There are a few things that need to be considered by the investor. These factors are mentioned below.

  1. The first and foremost consideration while starting a step-up SIP is the mode of increase in the SIP (whether through a fixed amount or through a percentage).
  2. Another important consideration is the frequency of the SIP whether it is annually or semi-annually or any other mode as per the agreement between the investor and the fund house. 
  3. Investors also have to consider their investment goals and their investment budget. . 


Step-up SIP is one of the many types of SIPs that can be opted by the investors to make mutual fund investments. SIPs help maximum investors get access to mutual fund investments and increase their wealth at a gradual pace. Step-up SIPs provide a boost to the investment portfolio of the investor and help them reach their investment objectives relatively faster.


 What is a step-up SIP calculator?

Step-up SIP calculator allows the investor to get the future value of the investment based on the inputs provided by the investor, like the incremental SIP, the frequency and the tenure of the SIP, and the expected returns

Can a step-up SIP be started online?

Yes. Just like any other SIP can be started online by visiting the website of the fund or by contacting the registered broker for the same.

Can the investor start a step-up SIP at any point during the tenure of the SIP?

The investor has to opt for the step-up SIP at the time of starting the SIP. the investor will have to notify the incremental amount, or the mode of increasing the SIP as well as the maximum limit beyond which it will be converted to a regular SIP.

Is it possible to stop the step-up SIPs before the completion of the tenure?

Yes. If the investor is not able to meet the SIP payments till the end of the tenure, they can stop the SIPs at any point by submitting a request for the same with the AMC of the broker. Alternatively, they can also pause a SIP for a maximum period of 3 months instead of stopping them completely.

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