Rs 4,000 SIP Vs Rs 2,000 Step-up SIP: Which can create larger corpus in 30 years? Can you guess?
SIP vs Step-Up SIP: Every parent, whether a mother or father, dreams of seeing their child’s wedding in style. However, with rising inflation, this dream seems increasingly difficult to achieve in the future. But if you start saving and investing strategically now, achieving this goal can be within reach.
To make the dream wedding possible, you need to build a substantial corpus of at least Rs 1 crore. And if you're looking to build wealth, a mutual fund SIP (Systematic Investment Plan) can be an effective investment option for you. One of its key advantages is the power of compounding over the long term. There are mainly two types of SIPs that you can consider:
Regular SIP: You invest a fixed amount consistently over time.
Step-Up SIP: You increase your SIP amount at regular intervals, helping you reach your financial goal faster.
So, which investment option will yield higher returns? The answer depends on how much you can invest and how much time you have to reach your goal. To make this clearer, let’s compare both strategies using an example over 30 years.
(Disclaimer: This is not investment advice. Calculations are projections. Please do your own due diligence or consult an advisor for retirement planning.)
Regular SIP: How much you accumulate in 30 years with Rs 4,000 monthly SIP
Regular SIP: Expected Capital Gain at 12% Annual Return
Regular SIP: Total Amount Received
Step-Up SIP
What is Step-Up SIP?
Step-Up SIP: How much you accumulate in 30 years with Rs 2,000 monthly SIP and 10% step-up
Step-Up SIP: Expected Capital Gain at 12% Annual Return
Step-Up SIP: Total Amount Received
SIP Calculation: Important Note
Both Regular SIP and Step-Up SIP are market-linked investments in mutual funds. This means the returns depend on market performance and cannot be guaranteed. While experts suggest that long-term SIPs can yield an average return of around 12 per cent, actual returns may vary depending on market conditions.