SIP or Systematic Investment Plan is a smart way to invest in financial markets where you invest a fixed amount periodically (say every month) into an instrument like mutual funds or stocks. SIP allows you to grow your wealth over time as it benefits significantly by dollar cost averaging. Step Up SIP is a flavor of SIP where you fractionally increase the amount you invest after every “x” months or years. By stepping up the SIP amount, the overall earning potential increases manifold. In this post, we’ll introduce you to a Step Up SIP Calculator Excel Sheet. Using this sheet, you can easily calculate your Step up SIP returns in a few clicks without any complex calculations.
Check out the below post to download an Excel sheet for a simple SIP (without step-up)
How to Calculate SIP Returns in an Excel Sheet?
Step Up SIP Example
Consider an investor John who invests a fixed amount of 1000 every month through a SIP route into an index mutual fund. John works as a salaried employee and his remuneration increases by 10% on average every year. So he decides to increase the SIP amount also by 10% every year. Hence the SIP amount will be 1100 per month from the next year, 1210 per month a year next to that, and so on. John is essentially stepping up his SIP amount.
Here is an illustration of how his yearly investment will look like for the first 5 years:
Year 1: 1000*12 = 12000
Year 2: 1100*12 = 13200
Year 3: 1210*12 = 14520
Year 4: 1331*12 = 15972
Year 5: 1464*12 = 17568
Total Investment: 73260
Had it been John invested 1000 per month without stepping up the SIP, his total investment would be 12000*5 = 60000 which is way lower than 73260.
Step Up SIP Calculator Excel Sheet
The Step Up SIP Calculator Excel Sheet contains two worksheets – the “Summary” worksheet and the “Month Wise Calculation” worksheet.
In the summary worksheet, you need to enter the investment parameters, and it will automatically calculate the “Total Investment”, “Final Capital” and “Total Returns”.
Here is a screenshot of what it looks like:
Below are the parameters you need to enter manually in the sheet:
Investment Per Month – The amount that you would start investing every month through SIP
Number of Months – Total investment period
Step Up Rate – The % by which you’ll step up your SIP every year
Initial Capital – Initial investment capital
Annual Return % – The expected return every year
Based on these parameters, the Excel sheet will automatically calculate the below for you:
Total Investment – Total invested amount at the end of the investment period
Final Capital – The final capital considering the annual return rate
Total Returns – The total returns, its the difference between the above two parameters
The “Month Wise Calculation” worksheet is the place where the actual calculation happens to arrive at the final capital.
Here is a screenshot of what it looks like:
The sheet calculates month-on-month investment amount, returns, and final amount by referring to what you entered in the parameters worksheet. Take a look at the formula for the “Monthly Investment” column where the amount is stepped up every 12 months.
Download Step Up SIP Calculator Excel Sheet
Download the sample Excel sheet to calculate Step Up SIP returns from the below link:
