What's a good SIP step-up percentage each year?
TL;DR: 10% annual step-up is the most commonly used default, and it approximately tracks typical annual salary growth for many salaried employees — but the right number for you should be based on your own realistic income growth, not a borrowed default. A step-up higher than your actual income growth becomes unsustainable within a few years; one set too low leaves real compounding benefit on the table.
Why a step-up matters more than people expect
A fixed monthly SIP amount held constant for 20 years means your investment stays flat in real terms while your income (hopefully) grows — an increasing share of your income goes to lifestyle, not investing, every year. A step-up SIP increases the contribution automatically, capturing part of every raise for investing rather than requiring a separate, easy-to-skip decision each year.
The actual impact of different step-up rates
On a ₹10,000/month SIP at 12% return over 20 years: with no step-up, the corpus reaches roughly ₹99.9L. With a 10% annual step-up, it reaches roughly ₹1.98 crore — nearly double, from the same starting amount, purely by letting the contribution grow with (a realistic assumption of) income.
Why higher isn't automatically better
A step-up set higher than your realistic income growth (say, 15-20% when your actual raises run closer to 6-8%) either requires cutting other spending disproportionately each year, or breaks down and gets skipped — which defeats the purpose more than a lower, sustained step-up would have. A step-up that's actually maintained every year beats a more ambitious one that gets abandoned in year 3.
How to pick your own number
- Look at your actual salary growth over the last 3-5 years, not an optimistic guess
- Set the step-up at or slightly below that realistic figure, not above it
- Revisit and adjust it after any major income change — a promotion or job change is a natural point to increase it further
Model your own step-up rate
Our SIP calculator includes a step-up field you can adjust directly, so you can see the exact corpus difference between your realistic step-up rate and the common 10% default, rather than assuming one size fits everyone.
Frequently asked questions
What is a SIP step-up?
An annual increase to your monthly SIP contribution, so it grows over time rather than staying fixed — commonly set to roughly match expected income growth, so an increasing share of your growing income goes toward investing automatically rather than requiring a separate yearly decision.
Is 10% a good SIP step-up rate?
It's the most commonly used default and roughly tracks typical salary growth for many salaried employees, but the right number depends on your own realistic income growth — a step-up set higher than your actual raises tends to become unsustainable and get abandoned, which defeats the purpose.
How much difference does a SIP step-up actually make?
A substantial one — on a ₹10,000/month SIP at 12% return over 20 years, a 10% annual step-up roughly doubles the final corpus compared to no step-up at all, purely from letting the contribution grow with income rather than staying fixed.