What is a SIP?
A Systematic Investment Plan (SIP) lets you invest a fixed amount every month into a mutual fund instead of investing a lump sum. Your money buys fund units at the market price each month, so you automatically buy more units when prices are low and fewer when prices are high — this is called rupee-cost averaging.
How step-up SIP works
With step-up SIP, your monthly investment increases by a fixed percentage every year — for example, a 10% step-up on a 10,000 monthly SIP becomes 11,000 in year two, 12,100 in year three, and so on. Since salaries usually rise each year, step-up SIP lets your investments grow with your income, and the extra compounding can add lakhs to your final corpus.
How the calculation works
The calculator compounds your monthly SIP at the expected annual return (divided into monthly periods). In goal mode, it reverses the math: it computes the future value of a 1-unit SIP with your step-up settings, then divides your target corpus by that figure to find the monthly SIP you need to start with.