SIP vs Lumpsum Calculator
Compare investing a lump sum today versus staggering the same capital across monthly SIP installments.
+₹3,81,171 gains
+₹1,87,379 gains
Lumpsum delivers 28.2% higher wealth in upward compounding markets
*Assumes continuous compounding. In down markets, SIP lowers downside risk through rupee cost averaging.
Important Educational Disclaimer for Calculator Results:
Calculations are estimates based on your entered inputs and selected return or inflation assumptions. Results are illustrative, hypothetical, and not guaranteed. Actual market returns, interest rates, tax liabilities, and inflation rates will vary and may materially alter your final outcome. This calculator does not constitute financial, investment, or tax advice.
Which strategy creates more wealth for your capital?
For a total capital pool of ₹5,00,000 over 5 years at 12% CAGR, investing as a one-time Lumpsum generates ₹8,81,171, while staggering via a monthly SIP of ₹8,333/month generates ₹6,87,359.
- In a consistently rising market, Lumpsum outperforms by ₹1,93,812 (28.2%) because 100% of your capital compounds from day one.
- However, SIP provides behavioral peace of mind and protects against immediate post-investment market crashes through Rupee Cost Averaging.
- Golden Rule: If you receive a large windfall (bonus, property sale, inheritance), consider a Systematic Transfer Plan (STP) from a liquid fund over 6–12 months rather than stretching over 5 years.
How This Calculator Works
Lumpsum gives 100% of capital the full time horizon to compound. SIP splits the same total capital into equal monthly chunks, so later installments spend less time compounding in the market.
Lumpsum = P × (1 + r)^t vs SIP = (P / n) × [({(1 + i)^n} - 1) / i] × (1 + i)Variables in Formula:
Worked Step-by-Step Example
You have ₹5,00,000 to deploy. You evaluate investing all ₹5L today vs investing ₹8,333/month over 5 years at 12% CAGR.
Key takeaway: Lumpsum mathematically wins in bull markets because money is in the market longer. For volatile markets, an STP combines the best of both worlds.
Common Mistakes to Avoid
⚠ Waiting forever for a market dip to invest lumpsum
Time in the market beats timing the market. Studies show that holding cash waiting for a crash underperforms regular investing over 90% of rolling periods.
⚠ Stretching SIP over too many years for existing cash
If you already have the capital, spreading it over 5+ years leaves cash sitting in low-yield savings accounts getting eaten by inflation.
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