Difference Between SIP and Step up SIP: In this era of inflation, everyone wants to save as much money as possible. To save money, people invest, which earns interest and saves money. For this, people mostly resort to SIP. But do you know that apart from SIP, there is also step-up SIP, which can also become a better investment for you.

What is SIP?
SIP is called Systematic Investment Plan. This is the simplest and most popular method of investment. In this, every month a fixed amount is deposited in the mutual fund as installment. After this it fluctuates according to the market price. Gradually it becomes a strong investment over a few years.

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What is Step-Up SIP?
Step-up SIP is an advanced form of regular SIP. In this, the person increases his invested amount every year, due to which it increases with time more than the normal investment. Just as income increases with time, similarly in Stepup SIP also the installment amount increases with time.

Difference between SIP and Step-Up SIP?
In SIP, you invest a fixed amount for a number of years, on which interest is charged as per the annual rate and this amount increases. So through Stepup SIP, you can increase the interest rate every year by increasing the fixed amount, this is more beneficial.

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Understand Step-up SIP with example

• Suppose you have taken a SIP of Rs 5,000 per month.
• If invested for 12 months, an investment of Rs 60 thousand is made and the interest on it increases by 10 to 12 percent.
• After one year, if you increase SIP to Rs 6 thousand, then the investment for the year will be Rs 72 thousand.
• So you will get interest on this Rs 72 thousand, in this case your investment will increase but at the same time you will also get interest and saving will be more.