Lumpsum vs. SIP Comparer
Compare the wealth generation of a one-time Lumpsum investment against a recurring Monthly Systematic Investment Plan (SIP).
Lumpsum Option
SIP Option
Compounding Growth Curve Comparison
Frequently Asked Questions
Is it better to invest as a lumpsum or SIP?
If you have a lump sum and are investing for long-term horizons, investing it early allows more time for compounding. However, for monthly income earners or during periods of market uncertainty, a SIP helps mitigate volatility through rupee-cost averaging.
What is rupee-cost averaging in SIPs?
Rupee-cost averaging means that since your SIP amount is fixed (e.g. ₹5,000 / month), you automatically purchase more units when the market is down and fewer units when the market is up. Over long cycles, this averages out the cost of acquisition per unit.
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The ₹10 Lakh Question: Do I Invest All At Once or Spread It Monthly?
You receive your annual bonus: ₹10 lakhs. Or an inheritance. Or the proceeds from a plot sale. Now comes the hardest question in retail investing: Do you invest it all today (lumpsum), or spread it over 12 months via SIP (systematic transfer plan)?
The market timing fear is real. Nobody wants to put ₹10 lakhs into the market the week before a 20% correction. SIP (or STP — Systematic Transfer Plan from liquid to equity funds) provides psychological comfort by averaging your entry price.
But here's the empirical truth: in markets that trend upward over time (as equity markets historically do), lumpsum investing statistically outperforms monthly SIP investing in about 60–70% of 10-year periods. The reason is simple — money invested earlier has more time to compound.
The practical middle path: invest 40% as a lumpsum immediately, and deploy the remaining 60% via a monthly STP over 6 months. You get meaningful immediate market exposure while managing entry-price anxiety. This approach has historically performed nearly as well as full lumpsum while dramatically reducing regret risk.
Use this comparison tool to see how your specific scenario plays out based on your expected return rate and investment horizon.
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