SIP vs Lumpsum · WealthJot.ai

⚡ SIP vs Lumpsum

Compare building wealth via monthly SIP vs one-time investment

A SIP vs Lumpsum of ₹12,00,000 for 10 years at 12% grows to ₹37.27 L.

₹37,27,018

₹37,27,018 lumpsum final value — 3.11× your money

Total Available Amount₹12,00,000

Expected Annual Return12%

Investment Period10 yr

SIP Final Value

₹23,23,391

Winner Advantage

₹14,03,627

Monthly SIP Amount

₹10,000

Lumpsum Multiplier

3.11×

SIP Multiplier

1.94×

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Formula

SIP Future Value = P × {[(1 + r)^n − 1] ÷ r} × (1 + r); Lumpsum Future Value = L × (1 + r)^t, compared for the same total amount invested

Worked example

Input	Value
Total Available Amount	₹12,00,000
Expected Annual Return	12%
Investment Period	10 yr
Lumpsum Final Value	₹37,27,018
SIP Final Value	₹23,23,391
Winner Advantage	₹14,03,627
Monthly SIP Amount	₹10,000
Lumpsum Multiplier	3.11×
SIP Multiplier	1.94×

What this comparison really tests

Given the same total money, does drip-feeding (SIP) or investing at once (lumpsum) end richer? The calculator runs both against your return assumption — but understand what drives the answer: in a steadily rising market the lumpsum wins (more money invested longer), while in a falling-then-recovering market the SIP wins (later instalments buy cheaper units).

Example₹12 lakh available today, 12% steady growth, 10 years: lumpsum → ~₹37.3 lakh; the same money as ₹10,000/month SIP → ~₹23.2 lakh (the un-invested balance idles while it waits). But run the SIP through a path that crashes 30% in year one and recovers: the SIP’s cheap mid-crash units flip the ranking. The path, which nobody knows in advance, decides.

The honest resolution: this is usually a false choice. Monthly income arrives monthly — SIP isn’t a strategy there, it’s the only option. The real question applies only to windfalls, and there the evidence says lumpsum-now wins in roughly two-thirds of historical periods, while an STP over 6-12 months buys insurance against the one-third where it doesn’t — at a modest expected cost. Choose by regret tolerance, not by prediction.

Common mistakeUsing this comparison to justify holding a windfall in savings “until clarity”. Both SIP and lumpsum assume the money reaches the market on a schedule; indefinite waiting is a third strategy — the historically worst one — earning 3% while equity compounds. Pick a schedule, any schedule, and automate it.

✓ You learnedLumpsum beats SIP in most rising periods (money in longer); SIP wins through crashes (cheaper units) and is the natural mode for salary income. For windfalls: invest now or via a fixed 6-12-month STP — the only losing move is waiting without a schedule.

FAQs

I have ₹20 lakh from a property sale — SIP it over 3 years?

Three years is likely too slow: the un-deployed balance drags at savings/liquid rates while equity compounds, and historical odds favour faster deployment. The standard compromise is an STP over 6-12 months from a liquid fund — most of the timing protection, a fraction of the drag. Reserve multi-year spreading for genuinely elevated personal risk (job loss on the horizon, near-term goals).