SIP vs Lumpsum
Same total, two ways to invest it: all at once today, or spread evenly across monthly SIPs over the same period.
Your numbers
At a steady return, the lumpsum ends ₹16,37,074 higher because all of the money is invested for the full period. Real markets don't return a steady rate — see the explanation below.
What this calculator shows
You enter a total amount, a return, and a time period. The calculator compares two choices: invest the whole total today, or divide it into equal monthly instalments over the period. Both are compounded monthly at the same rate, so the only difference is timing.
The formula, in plain words
Lumpsum value = total × (1 + monthly rate)^months. SIP instalment = total ÷ months, and SIP value uses the standard SIP formula with instalments at the start of each month. The monthly rate is the annual return ÷ 12.
A worked example
Take ₹12 lakh over 10 years at an assumed 12%. As a lumpsum, the estimate is about ₹39.6 lakh. As a SIP of ₹10,000 a month, it is about ₹23.2 lakh. The gap is large because, on average, SIP money is invested for only about half the period.
Why the real answer is less clear-cut
A steady-return calculator cannot show sequence risk — the effect of the order in which good and bad years arrive. If markets fall sharply soon after a lumpsum goes in, the lumpsum can trail a SIP that kept buying at lower prices. Many investors also find a SIP easier to stick with emotionally, and the best plan is usually the one you will actually keep. Treat this comparison as an illustration of time in the market, not a recommendation either way.
Frequently asked questions
So is a lumpsum always better?
Only in a world of perfectly steady returns. In real markets a lumpsum can be invested just before a fall, while a SIP buys at many different prices. Which one ends higher depends on the path prices take.
Why compare them this way?
It isolates one effect — how long the money is invested. In the lumpsum case every rupee is invested from day one; in the SIP the last instalment is invested for just one month.
What about money that arrives monthly, like salary?
Then there is usually no lumpsum to choose. For most salaried people a SIP is simply how investing fits their cash flow.
These figures are estimates for learning and planning, not investment, tax, or legal advice. Returns on market-linked investments are not guaranteed, and real outcomes depend on fees, taxes, timing, and actual returns. See our disclaimer.