Skip to the calculator

How-to guides

SIP vs lumpsum: which suits you, with numbers

Updated 2026-11-13

Quick answer

If you already have the money, a lumpsum has more time to grow at a steady return; if you earn month by month, a SIP is how you invest. At 12% for 10 years, โ‚น6,00,000 invested at once becomes โ‚น18,63,509, while โ‚น5,000 a month becomes โ‚น11,61,695.

Steps

  1. Decide whether you have a lump of money now or a regular income to invest.
  2. Pick a return you want to test, such as 8% and 12%, and the number of years.
  3. Run the lumpsum calculator with the full amount, then the SIP calculator with the monthly amount.
  4. Compare the final values, and think about what happens if markets fall right after you invest.

The maths: why the lumpsum looks bigger

Assume a steady 12% a year. โ‚น6,00,000 invested on day one grows for the full 10 years: 6,00,000 ร— 1.12^10 = โ‚น18,63,509. A SIP of โ‚น5,000 a month puts in the same โ‚น6,00,000, but over 120 months, so most of the money is invested for less than 10 years. It reaches โ‚น11,61,695.

That is not a fair fight: the lumpsum had all its money working from day one. If you compare like with like, a SIP is simply the way to invest money you do not have yet.

Where a SIP helps in real markets

Markets do not return a steady 12%. A SIP buys more units when prices are low and fewer when they are high, which averages your cost and removes the worry of choosing one entry day. A lumpsum invested just before a fall can take years to recover.

Many people split a large sum into several parts and invest it over some months. This is not a guaranteed improvement, but it can make it easier to stay invested.

How to choose

Use a SIP if your money arrives monthly, if you are new to investing or if volatility worries you. Consider a lumpsum if you already have money you will not need for many years and you can accept the ups and downs. Whatever you choose, returns are not guaranteed, and fees and taxes reduce what you keep.

Try it yourself

Common questions

Is SIP safer than a lumpsum?

A SIP spreads your entry over time, which reduces the risk of a badly timed purchase. It does not remove market risk.

Which gives higher returns?

It depends on what markets do. With a rising market a lumpsum usually wins; with a falling then recovering market a SIP can do better.

Can I do both?

Yes. Many investors put a lump sum in and also run a monthly SIP.

What return should I assume?

Test a range, such as 8%, 10% and 12%. No return is guaranteed.

Also read: How EMI is calculated, with a worked example