New Delhi, April 25 -- Sita and Gita started a monthly SIP of Rs.10,000 in the same flexi-cap fund. However, after 25 years, on retirement, Sita accumulated Rs.83 lakh more than Gita. The reason: Sita had opted for a 5% annual increase in the SIP amount. In this article, we will understand what a step-up SIP is and how it can help you accumulate a higher amount than a regular SIP.

Sita and Gita are 35 years old. They started a Rs.10,000 monthly SIP in a flexi-cap fund to build their retirement corpus. Sita opted for a step-up SIP, in which the SIP amount increased by 5% annually. Gita opted for a regular SIP, where the SIP amount stayed constant.

Both of them continued with their SIP till their retirement (age 60). Over the period of 25...