SIP vs Lumpsum Calculator
If you have a sum to invest, should it go in all at once or in monthly instalments? This calculator compares both at the same constant return.
Results
Lump sum value
₹39,60,464
- SIP value
- ₹23,23,391
- Lump sum minus SIP
- ₹16,37,074
- Higher value
- Lump sum
- Monthly SIP amount
- ₹10,000.00
Investing ₹12,00,000.00 at once grows to ₹39,60,464.27; spreading it as ₹10,000.00 a month grows to ₹23,23,390.76. The lump sum comes out ahead in this steady-return scenario.
Final value: lump sum vs SIP
- Lump sum₹39,60,464 (63.0%)
- SIP₹23,23,391 (37.0%)
Show the calculation steps
- Lump sum: ₹12,00,000.00 × (1 + i)^120 = ₹39,60,464.27.
- SIP: the same total split into 120 monthly instalments of ₹10,000.00, each growing until the end = ₹23,23,390.76.
- Difference = ₹16,37,073.51.
- With a steady positive return the lump sum always wins, because it is invested for longer. A SIP protects you from investing everything just before a fall, which a fixed return cannot show.
What the comparison shows
With a steady, positive return, a lump sum wins because all of the money is invested from day one. The SIP splits the same total over the period, so most of it is invested for less time.
Why people still choose SIPs
Real markets do not give steady returns. A SIP spreads purchases over different prices, reduces the risk of investing everything just before a fall and suits people who invest from monthly income rather than a lump sum.
Formula
Lump sum = Amount × (1 + i)^n
SIP = (Amount ÷ n) × ((1 + i)^n − 1) ÷ i × (1 + i)
Where:
- i
- = Monthly return
- n
- = Number of months
- Amount
- = The total to invest
Example calculation
₹12,00,000 invested over 10 years at 12%
Inputs
- Total Amount to Invest
- ₹12,00,000
- Expected Annual Return
- 12 %
- Investment Period
- 10 years
Result
- Lump sum value
- ₹39,60,464
- SIP value
- ₹23,23,391
- Lump sum minus SIP
- ₹16,37,074
- Higher value
- Lump sum
- Monthly SIP amount
- ₹10,000.00
Step-by-step
- Lump sum: ₹12,00,000.00 × (1 + i)^120 = ₹39,60,464.27.
- SIP: the same total split into 120 monthly instalments of ₹10,000.00, each growing until the end = ₹23,23,390.76.
- Difference = ₹16,37,073.51.
Important notes
- Results are estimates based on the values you enter. They assume the rates stay constant and exclude taxes and fees unless stated.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
Is a SIP better than a lump sum?
Not on returns in a steady scenario, but a SIP reduces timing risk and matches monthly income.
Why does this always favour the lump sum?
A constant return removes market ups and downs. In a falling-then-rising market a SIP can win.
Can I use it when I only have monthly income?
Yes, but the lump sum option is then hypothetical. Use the SIP calculator instead.
Related calculators
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- Investment CalculatorProject the value of an investment with a starting amount and regular monthly contributions, with a yearly growth table.
- Step-Up SIP CalculatorEstimate the value of a SIP that rises by a fixed percentage every year, compared with a flat SIP.
- Goal SIP CalculatorFind the monthly SIP needed to fund a future goal after inflation and any savings you already have.
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