Additional deposits and step-up investment growth
The step-up balance includes both additional contributions and their modeled growth. Its difference from the fixed SIP is not all investment profit: the step-up plan also requires more money from you. Additional deposits are the extra cash contributed above the fixed plan. Additional modeled gain subtracts that extra cash from the difference between ending balances. The table shows both contribution totals so the larger balance is not mistaken for extra profit alone.
For a constant monthly contribution without annual increases, use the SIP Calculator and keep the same return and timing assumptions.
The formula
Rates in the formula are decimals. The monthly return is the nominal annual assumption divided by twelve. The installment rises at the start of years two, three, and so on; the first twelve installments are unchanged. Both plans use the same rate, duration, and payment timing. A fixed increase adds the entered currency amount to each month’s payment once per year. An enabled monthly cap limits future payments without reducing the first-year installment.
A two-year contribution check
Start with 1,000 per month and a 10% annual increase. You contribute 12,000 in year one and 13,200 in year two, totaling 25,200. With a zero return, the final balance is exactly that total; a fixed SIP contributes 24,000.
How to use this calculator
- Enter the starting monthly installment and choose Percentage or Fixed amount for yearly increases.
- Enter the increase and whole years; optionally enable a monthly cap at least as large as the starting installment.
- Set the nominal annual return and installment timing. Review the live fixed-plan comparison, extra deposits, extra modeled gain and annual schedule.
Plan for the future installment
A percentage step-up compounds the payment itself. After several increases, the monthly commitment can be much larger than the starting amount. Read the final-year payment before interpreting the larger portfolio value as an affordable outcome.
The fixed-SIP line answers what happens if you keep contributing the original amount. It is a cash-flow comparison, not evidence that one investing strategy earns a higher rate. Both lines receive the identical assumed return.
Assumptions & limitations
What this calculation assumes
- Installments occur every month without interruption.
- Percentage or fixed-currency increases occur annually, beginning in year two, and stop at the optional monthly cap.
- Returns remain constant and are reinvested.
What to keep in mind
- Market losses and changing returns are not simulated.
- Taxes, fees, fund restrictions, and actual installment dates are excluded.
Common questions
Can I use a fixed currency increase?
Yes. Choose Fixed amount and enter the amount to add to the monthly installment at the start of each new year. For example, a 100 increase on a 1,000 starting payment gives 1,100 in year two and 1,200 in year three, before any cap.
Why is a zero-return case useful?
It isolates the money you would need to contribute and makes the annual step-up schedule easy to verify.
What happens when my SIP reaches the monthly cap?
The payment stays at the cap for later years. The cap must be at least the starting installment; it does not lower your first-year payment. The fixed comparison continues using the original starting installment.
Sources & further reading
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