ICRA18 min ago
Rs 10,000 SIP vs Rs 5,000 Step-Up SIP: Which investment can give higher returns over 30 years?
- Written by Priya Vishwakarma
Published: Zee Business| Updated: Zee Business
SIP vs Step-Up SIP: SIP and Step-up SIP are two options for investing in mutual funds. However, people sometimes find themselves confused about whether to invest in a standard SIP or opt for a Step-up SIP. Well, SIP is a market-linked investment option in which investors can invest monthly, quarterly, or annually based on their convenience and capacity.
What is Step-Up SIP? Step-Up SIP is a type of SIP plan that involves gradually increasing your monthly investment at regular intervals (for example, increasing by 5 per cent, 10 per cent every year).
However, it should be noted that SIPs are market-linked investments; returns are not fixed and can fluctuate. For this comparison, we are assuming a 12 per cent annual return rate.
Now, let's understand them and compare both the investment options by investing Rs 10,000 in SIP and Rs 5,000 in Step-up SIP per year for 30 years separately to see which option will give higher returns - SIP vs Step-Up SIP:
(Disclaimer: This is not investment advice. The calculations presented are projections. Please do your own due diligence or consult a financial advisor for personalised advice.)
1/10
What is the minimum amount to invest in an SIP?
1/10One can start investing in SIP with as low as Rs 500 per month.
2/10
What is the maximum amount to invest in SIP?
2/10There is no maximum limit for investing.
3/10
Step-Up SIP vs Regular SIP Returns: Assuming the scenario
3/10Which is better SIP or Step-Up SIP: Let's consider two individuals — Abhay and Anubhav. Abhay invests Rs 10,000 annually in a standard SIP. Anubhav invests Rs 5,000 annually in a step-up SIP over a period of 30 years. Now, let's compare who might earn higher returns over these 30 years.
4/10
SIP Investment: What is the total amount Abhay will invest in 30 years?
4/10According to the calculation, if Abhay invests Rs 10,000 per month in SIP mutual funds for 30 years, then he will invest a total amount of Rs 36,00,000.
5/10
Regular SIP: How much can the capital gains be?
5/10The estimated capital gain could be Rs 2,72,09,732.
6/10
Regular SIP: How much corpus can SIP create in 30 years?
6/10With a 12 per cent annual return rate, if Abhay invests Rs 10,000 per month in a regular SIP, the total amount received can be Rs 3,08,09,732.
7/10
Step-up SIP Calculations
7/10Now, let's look at the Step-Up SIP and calculate how much money Anubhav can accumulate with an initial investment of Rs 5,000 per month, increasing by 10 per cent annually over 30 years.
8/10
Step-Up SIP Wealth Creation Calculator: What is the total amount Anubhav will invest in 30 years?
8/10According to the calculation, if Anubhav invests Rs 5,000 per month in SIP mutual funds for 30 years, increasing the amount by 10 per cent each year then, you will invest a total amount of Rs 98,69,641.
9/10
Step-Up SIP Calculator: How much can the capital gains be?
9/10The estimated capital gain could be Rs 3,00,59,240.
10/10
Rs 5,000 Step-Up SIP Returns After 30 Years: How much money may Anubhav accumulate?
10/10With a 12 per cent annual return rate, if you invest Rs 5,000 per month in Step-Up SIP, the total amount received can be Rs 3,99,28,881.
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