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Investing guide

SIP vs Lumpsum: which should you choose?

Both put money into the same mutual funds — the only difference is timing. A lumpsum invests everything today; a SIP invests a fixed amount every month. Here is how to choose.

A worked example: ₹12 lakh, 10 years, 12%

Say you have ₹12 lakh. Invest it as a lumpsum today, or as a ₹10,000 monthly SIP over 10 years (also ₹12 lakh in total):

ApproachInvestedValue in 10 yrs*
Lumpsum (₹12L today)₹12,00,000≈ ₹37.3 lakh
SIP (₹10k/month)₹12,00,000≈ ₹23.2 lakh

The lumpsum ends higher because the full amount compounds for the entire 10 years, while SIP money is invested gradually. *But this assumes a steady 12% — in the real world, if the market falls right after your lumpsum, the SIP would have done better.

When LUMPSUM wins

You already have the money, your horizon is long, and you can stay invested through dips. Mathematically, time in the market beats waiting.

When SIP wins

You invest from monthly income, you want discipline without thinking about timing, or markets feel expensive and you would rather average in. SIP removes the "is now a good time?" question.

Run both on your numbers

Compare a monthly SIP and a one-time lumpsum for your amount and horizon.

SIP Calculator →Lumpsum Calculator →

Frequently asked

Is SIP safer than lumpsum?
SIP spreads your entry across many months, so it lowers the risk of investing everything just before a market fall (timing risk). Lumpsum has higher timing risk but, on average in rising markets, tends to end up higher because the money is invested for longer.
What if I get a bonus or windfall?
If markets look reasonable and your horizon is long, investing the lumpsum immediately is statistically better than drip-feeding it. If you are nervous, a middle path is to spread a large amount over 3–6 months (STP).
Can I do both?
Yes — most investors run a monthly SIP for discipline and add lumpsums when they have surplus cash or when markets correct sharply.

Illustrative figures assume a constant 12% annual return; actual mutual fund returns vary. Estimates for planning, not investment advice.