Lumpsum vs SIP Calculator
Got a lump sum to invest? Compare investing it all at once vs spreading it as monthly SIP. See which strategy wins after tax and inflation.
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%
Yrs
SIP equivalent: ₹4,167/month for 10 years
LumpsumWINNER
₹15.53 LSIP
₹9.68 LLumpsum wins by ₹5.85 L. In a consistently growing market, investing the entire amount upfront gives compounding a head start.
Growth Comparison
Lumpsum
SIP
Lumpsum vs SIP: Which is Better?
The "lumpsum vs SIP" debate doesn't have a universal answer. Mathematically, lumpsum wins in a rising market because your entire capital compounds from day one. SIP wins in volatile or falling markets through rupee cost averaging.
How This Comparison Works
We take your total investment amount and compare two scenarios:
- Lumpsum: Invest the entire amount on day 1. FV = P × (1+r)n
- SIP: Divide the same total equally across all months. Monthly SIP = Total ÷ (Years × 12)
The Reality Check
Toggle inflation and LTCG tax to see how both strategies perform in the real world. The gap between nominal and real returns applies to both — but the absolute difference changes which strategy "wins" by how much.
When Lumpsum Wins
- Markets are consistently rising (bull markets)
- You have a very long time horizon (15+ years)
- Expected returns are high (equity in growing economy)
- You received a windfall (bonus, inheritance, property sale)
When SIP Wins
- Markets are volatile or in a downtrend
- You're investing from monthly salary (no lumpsum available)
- You want to reduce timing risk
- Your investment horizon is shorter (3-7 years)
Is lumpsum better than SIP?
Mathematically, lumpsum beats SIP in a consistently rising market because your entire capital compounds from day one. Historical data shows lumpsum outperforms SIP about 65-70% of the time over 10+ year periods. However, SIP protects against bad timing and is practical for salaried investors.
When should I invest lumpsum?
Consider lumpsum when: you receive a bonus, inheritance, or windfall; markets have corrected significantly (>15-20%); you have a long investment horizon (10+ years); or you're comfortable with short-term volatility. Avoid lumpsum if markets are at all-time highs and you're investing for <5 years.
How does this calculator compare lumpsum and SIP?
We take your total investment amount and compare two scenarios: (1) Lumpsum — investing the entire amount on day 1, and (2) SIP — dividing the same total equally across all months (Total ÷ Years × 12 = monthly SIP). Both use the same return rate for a fair comparison.
Why does lumpsum usually win in this calculator?
Because this calculator assumes a constant annual return rate. In reality, markets fluctuate. With constant returns, money invested earlier always beats money invested later. The gap widens with higher return rates and longer time periods.
What about rupee cost averaging in SIP?
Rupee cost averaging means you buy more units when prices are low and fewer when prices are high. This reduces your average purchase cost in volatile markets. Our calculator uses a constant return rate, so it doesn't capture this SIP advantage. In real markets with volatility, SIP's advantage is greater than shown here.
Should I do STP instead of lumpsum?
Systematic Transfer Plan (STP) is a middle ground — you park your lumpsum in a liquid/debt fund and transfer a fixed amount to equity monthly. This gives you debt fund returns on the parked amount while providing SIP-like entry into equity. It's a good strategy for large amounts (₹10L+) in uncertain markets.
How does LTCG tax affect the comparison?
LTCG tax (12.5% + 4% cess on gains above ₹1.25L) applies equally to both strategies on redemption. However, since lumpsum typically generates higher absolute gains, it also incurs higher absolute tax. Toggle LTCG in our calculator to see this difference.
What if I have ₹10 lakhs — should I invest all at once?
For ₹10 lakhs with 10+ year horizon: consider investing 50-60% as lumpsum immediately and the rest via STP over 6-12 months. This captures most of the lumpsum advantage while providing some protection against immediate market correction.