What a step-up SIP looks like after two promotions
The step-up calculator raises the instalment by one percentage, every year, for the whole tenure. Two promotions do not do that. They raise the debit twice, and then it stays put until the next real hike. The 12% return below is an assumption. The 10% yearly step is the input people type by mistake.
Last updated: · 5 min read
15 years at an assumed 12%
Bar chart of a flat ₹8,000 SIP near ₹40.37 lakh, two promotion jumps near ₹64.70 lakh, and a 10% yearly step near ₹69.47 lakh.
- Flat ₹8,000₹40.37 lakh
- Two raises, then flat₹64.70 lakh
- 10% step every year₹69.47 lakh
The percent box repeats itself
Type ₹8,000, a 10% step, 12% and 15 years in the step-up SIP calculator. The instalment becomes ₹8,800 in year two, and it keeps that 10% going until year 15, when it is about ₹30,380 a month. The expected value is about ₹69,47,080. You invest about ₹30,50,158. Nothing in that screen is "two promotions". It is a raise every year.
A flat ₹8,000 on the SIP calculator, same rate and same 15 years, invests ₹14,40,000 and ends near ₹40,36,608. That is the path if neither promotion changes the mandate. Both of these you can check on the site. The calculator will not stop you using the yearly step for a career that only jumped twice.
Two jumps, then a flat debit
Take a schedule the step-up box cannot store. Years 1 and 2 stay at ₹8,000. Years 3, 4 and 5 are ₹12,000, the first promotion. Years 6 through 15 are ₹16,000, the second, and then it stops. Each month's instalment is added at the start of the month and compounded at 12% a year, divided by 12. That is the same rule as the step-up tool. The cash paid in is ₹8,000 × 24 + ₹12,000 × 36 + ₹16,000 × 120, which is ₹25,44,000. The balance at the end is about ₹64,69,689.
That is less than the yearly 10% step, and it invests less, because the instalment stops at ₹16,000 instead of climbing to ₹30,380. It is also more than staying at ₹8,000. The point of writing it out is that two promotions have a last instalment you can already see: ₹16,000. The yearly step's last instalment is a future salary you have not been offered.
- Flat ₹8,000: about ₹40.37 lakh, from ₹14.40 lakh paid in.
- Two jumps, ending at ₹16,000: about ₹64.70 lakh, from ₹25.44 lakh paid in.
- 10% every year: about ₹69.47 lakh, and the last debit is about ₹30,380.
Check the instalment you can already afford
After the second promotion, the honest calculator check is a flat SIP at the new amount. ₹16,000 a month is a number you can hold next to take-home now. The yearly step's ₹30,380 is a number you can hold next to a take-home you hope to have in year 15. If that hope is the only way the picture works, use the two jumps, or use a step small enough that a dull appraisal still clears the mandate.
You cannot get the ₹64,69,689 from one screen. The step-up tool has a single percentage. The SIP tool starts whatever you type from month one. Adding three separate SIP results would be right only if you are careful about when each extra rupee starts. The hand total above is the schedule. Use the calculators to check the flat ₹8,000 and the 10% step, which are the two paths people confuse with it.
When a later hike is real, change the mandate then
A third promotion is a third edit, made in the month the new take-home arrives. It is not a reason to turn on a permanent step today. Let one ordinary salary cycle land, pay the costs that came with the role, and then raise the SIP by a slice of what is left.
The 12% does not become more reliable because the career went well. It is still the return you typed. A promotion changes the instalment. It does not change the market.
Worked example: two raises versus a step that never stops
The return is an assumed 12% for 15 years. The two-jump total uses the same start-of-month compounding as the step-up calculator. The calculator itself only runs the first and the third rows.
| Item | Figure |
|---|---|
| Flat SIP | ₹8,000 for 15 years, about ₹40,36,608 |
| Cash paid into the flat SIP | ₹14,40,000 |
| Two promotions | ₹8,000, then ₹12,000 from year 3, then ₹16,000 from year 6 |
| Cash paid into the two jumps | ₹25,44,000 |
| Two-jump value | About ₹64,69,689 |
| 10% step every year | About ₹69,47,080, last instalment about ₹30,380 |
Use the step-up calculator for a raise you expect every year. For two promotions, raise the flat SIP twice and stop. The larger yearly-step corpus is the one that assumes a hike on every anniversary.
Sources
Results from FinanceChacha are estimates for planning, not financial or tax advice. Read the disclaimer.
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