Step up your SIP each year by about the rate your take-home pay rises, because that keeps the share of pay you invest steady, and go higher only if your raise leaves room after prices. On a ₹25 lakh CTC under FY 2026-27 rules, an 8% raise lifts take-home about 6.6%, so a 5% step-up lets that share slip and a 10% step-up lifts it a little. Over 20 years at an assumed 12%, ₹25,000 stepped up 10% a year builds about ₹4.92 crore against about ₹2.47 crore flat.

How much should you increase your SIP every year?

A step-up SIP, also sold as a top-up SIP, raises the instalment at a set interval, usually once a year, by a fixed amount or a percentage, depending on the fund house; what is a SIP covers the basics. The rate you pick decides your savings rate: the SIP divided by your take-home pay.

If the SIP rises more slowly than take-home, the savings rate falls each year. If it rises at the same pace, the rate holds. If it rises faster, the rate climbs, and your spending grows more slowly than your pay.

The pace to match is take-home, not CTC. Tax, PF and the gratuity provision take a share of every raise, so at ₹25 lakh CTC in FY 2026-27 about ₹62 of each extra ₹100 reaches your bank account. The same 8% raise lifts take-home about 7.1% at ₹15 lakh CTC and 6.7% at ₹40 lakh, so the answer barely moves across salaries.

What do 5%, 10% and 15% build on Sunita's ₹25,000?

Sunita is 32 and earns ₹25 lakh CTC, which leaves about ₹1,56,700 a month (FY 2026-27, new regime, PF on full wages; see CTC vs in hand salary). She invests ₹25,000 a month, a savings rate of 16.0%, has ₹10 lakh already invested, and her raises run at about 8% a year.

₹25,000 a month for 20 years Put in Value at an assumed 12% Last monthly instalment Savings rate in year 20
Flat ₹60,00,000 about ₹2.47 crore ₹25,000 4.7%
Up 5% a year about ₹99,19,800 about ₹3.40 crore about ₹63,200 12.0%
Up 10% a year about ₹1,71,82,500 about ₹4.92 crore about ₹1,52,900 29.0%
Up 15% a year about ₹3,07,33,100 about ₹7.49 crore about ₹3,55,800 67.4%

The last column assumes her take-home keeps rising 6.6% a year, to about ₹5,27,900 a month by year 20. All four rows use the same assumed 12% a year (October 2026, not a forecast), worked as 1% a month with each instalment at month-end, the way the FI calculator does it; a start-of-month calculator shows about 1% more. Real equity returns will land above or below.

The 15% row triples the flat corpus but needs five times the money put in. A step-up holds the savings rate only while pay rises as fast: at 5% hers drifts down to 12%, at 10% it climbs to 29%, and at 15% it would take two-thirds of her pay.

What does each rate ask of Sunita's raise?

Her first raise takes her CTC to ₹27 lakh and her take-home to about ₹1,67,100, about ₹10,300 a month more, a rise of 6.6%.

Step-up SIP after the raise Share of the ₹10,300 raise Savings rate (was 16.0%)
Flat ₹25,000 nil 15.0%
5% ₹26,250 12% 15.7%
10% ₹27,500 24% 16.5%
15% ₹28,750 36% 17.2%

Prices take their share as well. If her ₹1,20,000 of monthly spending rises an assumed 6%, keeping the same life costs ₹7,200 more, which leaves about ₹3,100 of the raise. A 5% step-up uses 40% of that and a 10% step-up 80%, while 15% needs about ₹600 more than is left, so it comes out of her cushion or her spending. So 10% is the highest of the three rates her raise pays for while her life keeps pace with prices. Salary hike vs inflation works out how much of a raise is real.

In the FI calculator, with age 32, ₹1,20,000 of spending, ₹10 lakh already invested and ₹25,000 a month, the step-up setting moves her financial independence year from 2058 (age 64) flat to 2055 (age 61) at 5%, 2051 (age 57) at 10% and 2047 (age 53) at 15%. It assumes you can afford the step-up every year. Put in your own numbers and switch between Flat, 5%, 10% and 15% to see the year each rate gives you.

When should you change the step-up rate?

A step-up covers ordinary yearly raises on its own. A job change that lifts pay by 30% does not fit a fixed rate; raise the SIP by hand that month, or the new pay drifts into spending, which is how lifestyle creep starts. Other moments to raise it, such as a loan ending, are in how much SIP on a ₹20 lakh salary.

Check the rate again in a year the raise does not beat prices. A step-up that runs anyway is paid from spending, which is fine if planned and painful if not. At many fund houses a registered step-up cannot be edited, so changing the rate means stopping the SIP and registering a new one; the units already bought stay invested.

Dhi answers questions such as what a step-up does to your savings rate and goals from your own numbers, and maps your investments to those goals. Dhi nudges you when something needs attention, earns no commissions and never mis-sells.

Frequently asked questions

Yes. They are two names for the same facility, and the maths in this post applies to both. Fund houses differ on the details: most step up yearly by default, some also allow every six months, and some take only a fixed amount, so check the scheme's registration form.
A fixed amount shrinks as a percentage over time. ₹25,000 raised by ₹2,500 every year starts as a 10% increase, but the last raise, from ₹70,000 to ₹72,500, is under 4%, and after 20 years it builds about ₹3.92 crore at an assumed 12% a year, between the 5% and 10% rows of the table. A percentage step-up keeps pace with a salary that rises by a percentage.
A flat SIP of about ₹49,800 a month from the start builds the same ₹4.92 crore in 20 years as ₹25,000 stepped up 10% a year, at an assumed 12%, while putting in about ₹1.2 crore instead of ₹1.72 crore, because the money is invested earlier. Starting bigger needs that money now; a step-up matches the amount to pay you have not yet earned.

This is general information for salaried individuals in India, not personalised financial advice.