From mint · Sheetal Goel · · 1m
Regular vs Step-Up SIPs: Higher Returns or Larger Corpus?
Step-up SIPs boost corpus but lower XIRR: ₹1,000 fixed top-ups vs 10% annual increases.
In brief
Step-up SIPs boost corpus but lower XIRR: ₹1,000 fixed top-ups vs 10% annual increases. Step-up SIPs create larger corpus but lower XIRR than regular SIPs over 5-25 years. Originally reported by mint.
Quick answers
- What are step-up SIPs?
- A step-up SIP increases monthly contributions by a fixed amount or percentage annually.
- What is the key takeaway from Regular vs Step-Up SIPs: Higher Returns or Larger Corpus??
- Step-up SIPs create larger corpus but lower XIRR than regular SIPs over 5-25 years.
What are step-up SIPs?
A step-up SIP increases monthly contributions by a fixed amount or percentage annually.
Fixed vs variable top-up SIPs
Fixed top-up SIPs add ₹1,000 yearly; variable top-up SIPs increase monthly contributions by 10% annually.
Investment comparison over time
Regular SIPs yield higher XIRR but step-up SIPs create larger corpus over 5-25 years.
Fixed top-up SIP results
₹1,000 annual top-ups create ₹318.22 lakh corpus with 12.70% XIRR after 25 years.
Variable top-up SIP results
10% annual top-ups create ₹413.56 lakh corpus with 12.32% XIRR after 25 years.
XIRR comparison
Regular SIPs deliver higher XIRR than step-up SIPs across all investment periods.
Key takeaway
Choose top-up amounts you can sustain as income grows, not just larger corpus.
The essence
Step-up SIPs create larger corpus but lower XIRR than regular SIPs over 5-25 years.
