A Systematic Investment Plan (SIP) is a financial planning tool offered by mutual funds to help individuals invest small amounts regularly, instead of a lump sum. The frequency of investment can be weekly, monthly, or quarterly. SIPs make investing accessible and disciplined, allowing investors to buy units of a particular mutual fund scheme at the current market rate. Over time, SIPs enable investors to average their purchase cost through a method known as dollar-cost averaging, potentially reducing the impact of market volatility. This systematic approach to investing helps in building wealth over the long term by leveraging the power of compounding.

A Step-Up SIP, also known as a Top-Up SIP, is an enhanced version of the standard Systematic Investment Plan (SIP) that allows investors to increase their investment amount at regular intervals. This feature enables investors to raise their SIP contribution systematically in alignment with an increase in their income or cash flow over time. For example, an investor might start with a monthly SIP of $100 and decide to step up the investment by $20 every year. This approach not only disciplines the savings habit but also potentially accelerates the wealth accumulation process, taking advantage of the compounding effect over a longer period. It's an effective strategy for those looking to incrementally increase their investments as their financial capacity grows.