Finance & Investment · Mutual Funds & SIP
SIP vs Lumpsum Calculator
You have a sum to invest. Compare putting it all in today with spreading it over several months through a SIP or STP while the rest waits in a liquid fund — at your expected return and under better and worse market scenarios.
Your inputs
Quick start — try a typical case
₹ 12 lakh
Total time from today, including the months the SIP takes.
Your result Live
Lump Sum Ahead By
₹86,081
Lump sum ₹37,27,018 vs SIP over 12 months ₹36,40,937, after 10 years at 12%
- Lump Sum Grows To
- ₹37,27,018
- SIP over 12 Months Grows To
- ₹36,40,937
- Difference
- 2.4% in favour of the lump sum
- Monthly SIP Instalment
- ₹1,00,000
If markets turn out differently
4 rowsIn practice returns arrive unevenly: a fall soon after a lump-sum investment hurts it, and that timing risk is what a SIP reduces. With steady returns above the cash rate, investing sooner always wins.
An estimate from the assumptions you entered, not a guaranteed outcome.
How this is calculated
Lump sum = A × (1 + r)^T · SIP: A ÷ n moved from cash (earning c) into the investment each month for n months, then everything grows at r until T
- A
- Amount to invest
- n
- Months the SIP is spread over
- r, c
- Investment return and return on waiting cash
- T
- Comparison period
This compares the same money both ways, so it's a fair test. A lump sum is fully invested from day one; a SIP keeps part of the money in cash for a while, earning less. If the market rises steadily, the lump sum wins by about the return gap on the waiting money. If the market falls early, spreading the investment wins — the scenario table shows both.
Assumptions & sources
- Both strategies earn the same annual return (compounded monthly at the effective rate), applied evenly; real markets are volatile.
- SIP instalments are made at the start of each month; interest earned by the waiting money is invested with the last instalment.
- Taxes, exit loads and expenses are ignored for both.
- 1Mutual fund investor education (SIP, lumpsum, risk) — AMFI — Association of Mutual Funds in India
- 2Investments (Bodie, Kane & Marcus), chapters on returns, compounding and the time value of money — McGraw-Hill
- 3Dollar-cost averaging just means taking risk later — Vanguard Research (2012)
Calculator ID FIN-INV-SIPLUMP-001 · version 1.0.0
Common questions
Which is better, SIP or lump sum?
If returns are steady and positive, a lump sum ends up higher because the money is invested longer. A SIP protects you from investing everything just before a fall. If you'd lose sleep over a 20–30 % drop right after investing, spreading the sum is reasonable.
What is an STP?
A Systematic Transfer Plan parks the lump sum in a liquid or debt fund and transfers a fixed amount into an equity fund each month — exactly the 'SIP with waiting money earning interest' this calculator models.
Why not compare a SIP of the same amount every month for years?
That compares different amounts of money. This calculator compares one sum invested two ways; for regular monthly saving use the SIP Calculator.