SIP vs Lumpsum Calculator

Compare returns on SIP and Lumpsum investments

Invested Amount
₹6,00,000
Estimated Returns
₹5,42,586
Total Value
₹11,42,586
Total Invested
₹6,00,000
Total Returns
₹5,42,586
Invested Amount
₹1,00,000
Estimated Returns
₹2,10,585
Total Value
₹3,10,585
Invested Amount
₹1,00,000
Total Returns
₹2,10,585


SIP vs Lumpsum Calculator – Finally, See Which Strategy Actually Wins for Your Money

The Debate That Never Ends

Ask ten Indians whether SIP or lumpsum is better, and you’ll get ten different opinions. Your uncle says lumpsum. Your colleague who just discovered investing says SIP. The YouTube finance guy you watched last night says it depends.

Everyone has an opinion. Very few people have actually run the numbers side by side.

That’s exactly what this calculator does. You put in the same total amount for both strategies, set the same return and time horizon, and see – in black and white – which one actually comes out ahead. No guessing. No opinions. Just math.

How This Calculator Is Different From the Others

Most calculators on the internet calculate SIP and lumpsum separately. This one puts them right next to each other so you can compare apples to apples.

Same ₹6 lakhs. Same 12% return. Same 10-year period. But one invests it as ₹5,000 per month over 10 years, and the other dumps the full ₹6 lakhs on day one. The results? Often very different. And which one wins depends heavily on what the market does during that period.

How to Use It

Step 1 – Enter the total investment amount. This is the total money available. For SIP, the calculator will automatically divide this into equal monthly installments over your chosen period. For lumpsum, it invests the entire amount on day one.

Step 2 – Set the expected annual return. Use the same return for both – this is important for a fair comparison. 10-12% is reasonable for equity funds over the long term.

Step 3 – Choose your investment period. How many years are you comparing? The longer the period, the more interesting the comparison becomes – especially because compounding behaves very differently for the two strategies.

Once you hit calculate, you’ll see both strategies’ results side by side: total invested, estimated returns, and final corpus – along with a chart showing how each grows over time.

The Math: Why They Behave So Differently

Lumpsum Math

The entire amount compounds from day one: A = P × (1 + r)^n

If you invest ₹6,00,000 at 12% for 10 years: A = 6,00,000 × (1.12)^10 = 6,00,000 × 3.1058 = ₹18,63,497

SIP Math

Each monthly installment compounds for a different number of months: FV = P × ({[1 + i]^n – 1} / i) × (1 + i)

Where P = ₹5,000/month, i = 0.01 (monthly), n = 120 months: FV = 5000 × ({[1.01]^120 – 1} / 0.01) × 1.01 = ₹11,61,695

The Difference

Same ₹6 lakhs invested. Same 12% return. Same 10 years. But lumpsum gives you ₹18.6 lakhs while SIP gives you ₹11.6 lakhs.

Why such a massive gap? Because lumpsum had the full ₹6 lakhs compounding from month one. SIP only had ₹5,000 compounding in month one, ₹10,000 in month two, and so on. It takes a while for the SIP corpus to build up enough mass for compounding to really kick in.

But wait – this comparison assumes you had ₹6 lakhs sitting around on day one ready to invest. Most salaried Indians don’t. They earn money every month. That’s exactly when SIP becomes the only realistic option.

When Does Each Strategy Actually Win?

Lumpsum Wins When:

  • You invest during or right after a market crash (buying at low prices)
  • You have a long time horizon (7+ years)
  • You actually have the full amount available right now
  • Markets trend upward throughout your holding period

SIP Wins When:

  • You invest during or right before a market peak (your monthly purchases average out the high price)
  • Markets are volatile or trending sideways
  • You don’t have a large sum available upfront
  • You’re building wealth from monthly income

The Honest Truth

Over any given 10-15 year period, lumpsum has historically beaten SIP more often than not – roughly 60-70% of the time in studies of Indian markets. But the times it loses, it can lose badly. And most importantly, most people simply don’t have a large lumpsum available to invest.

SIP wins on consistency, accessibility, and sleep at night. Lumpsum wins on raw returns – if you time it well.

Real Indian Scenarios: Who Wins?

Scenario 1: The Annual Bonus

Every January, Deepak gets a ₹2 lakh bonus. He has two choices:

  • Option A: Invest the full ₹2 lakhs as lumpsum every January
  • Option B: Spread it as ₹16,667 per month SIP throughout the year

Over 15 years, assuming 12% returns:

  • Lumpsum approach: approximately ₹1,12,00,000
  • SIP approach: approximately ₹89,00,000

Lumpsum wins by a healthy margin here, because each January he’s deploying a fresh chunk that has a full year head start on compounding over the SIP version.

Scenario 2: The Market Crash Investor

In March 2020, Sneha had ₹3 lakhs saved up. Markets crashed 30%.

  • She invested the full ₹3 lakhs as lumpsum at the bottom
  • Her friend Rahul had been doing ₹25,000/month SIP for the past year

By March 2023, Sneha’s lumpsum had grown to approximately ₹5,80,000. Rahul’s SIP corpus (₹3 lakhs invested, but spread over 12 months before and after the crash) was worth approximately ₹4,20,000.

Sneha won because she deployed everything at the cheapest possible price.

Scenario 3: The Peak Market Investor

Aisha had ₹5 lakhs in January 2020, right before the crash.

  • She invested it all as lumpsum
  • Her brother did ₹41,667/month SIP for 12 months

After the crash and recovery, by January 2022:

  • Aisha’s lumpsum: approximately ₹6,10,000 (she had to sit through a painful 30% drop)
  • Brother’s SIP: approximately ₹5,80,000 (bought cheaper units during the crash months)

Lumpsum still won eventually, but the SIP version had much less emotional stress during the crash period.

Which Should You Actually Choose?

Here’s a simple framework to decide:

Choose Lumpsum if:

  • You have a bonus, inheritance, or savings that’s been sitting idle
  • You can genuinely leave the money untouched for 5+ years
  • You won’t panic if the value drops 20-30% in the short term
  • The money is already available – you’re not taking it from your monthly budget

Choose SIP if:

  • You’re investing from your monthly salary
  • You don’t have a large sum available right now
  • You’re a beginner and consistency matters more to you than maximum returns
  • You want to sleep well at night regardless of what the market does

Choose Both if:

  • You have a monthly salary (use SIP for that)
  • AND you occasionally get bonuses or windfalls (use lumpsum for those)
  • This is genuinely what most smart Indian investors do

The Tax Angle – Does It Change the Comparison?

For equity mutual funds, the tax treatment is the same regardless of whether you invested via SIP or lumpsum:

  • Held > 1 year: LTCG above ₹1.25 lakh taxed at 12.5%
  • Held < 1 year: STCG taxed at 20%

One subtle difference: with SIP, each monthly installment has its own holding period. So if you’ve been doing SIP for 18 months and you redeem everything, the last 6 months of installments are technically short-term (held less than 1 year) and taxed at 20%. With lumpsum, if you’ve held for over 1 year, everything is long-term.

This means lumpsum can be slightly more tax-efficient if you’re planning to redeem everything at once after 1+ years. But the difference is usually small compared to the overall returns.

Mistakes People Make When Comparing the Two

Comparing Unfair Scenarios

“I invested ₹1 lakh as lumpsum and my friend did ₹5,000 SIP. After 2 years, my lumpsum is worth more.” Of course it is – you invested ₹1 lakh, they invested ₹1.2 lakhs over 2 years. The amounts aren’t even equal. Always compare the same total investment amount over the same period.

Assuming Lumpsum Always Wins

It doesn’t. In flat or declining markets, SIP can actually come out ahead because it picks up units at lower prices throughout the period.

Forgetting That Most People Can’t Do Lumpsum

Reading an article that says “lumpsum beats SIP 65% of the time” is interesting trivia. But if you don’t have ₹5 lakhs sitting around, it’s irrelevant. Work with what you actually have.

Ignoring the Emotional Factor

A lumpsum investment that drops 30% in the first month will make most people sell in a panic. An SIP that dips the same amount feels less painful because you’re only seeing a small chunk affected at a time. The “best” strategy is the one you’ll actually stick with.

Quick Tips Before You Decide

Use this calculator with at least 3 different market scenarios. Try 8%, 12%, and 15% returns. See how the gap between the two strategies changes. This gives you a much more realistic picture than any single scenario.

If you’re doing lumpsum, consider STP as a middle ground. A Systematic Transfer Plan lets you park your money in a liquid fund and automatically transfer fixed amounts to equity over 3-6 months. You get most of the benefits of lumpsum timing while reducing the risk of investing everything at a peak.

Don’t let the calculator make you anxious. Whether SIP or lumpsum “wins” in any given scenario matters far less than actually investing in the first place. The biggest wealth destroyer is sitting on the sidelines doing nothing.

Think about your personality, not just the numbers. If seeing your portfolio drop 30% would make you sell everything, lumpsum is risky for you regardless of what the math says. Stick with SIP and sleep well.

Questions That Actually Come Up

If lumpsum often gives better returns, why does anyone do SIP? Because most people don’t have large sums sitting around. SIP lets you invest from monthly income – which is how most Indians actually earn money. Accessibility matters more than theoretical optimality.

Can I do both at the same time? Absolutely. Run a monthly SIP from your salary AND invest any bonuses or windfalls as lumpsum. This is actually the most common strategy among serious Indian investors.

What if I have ₹1 lakh and I can’t decide? Split it. Put ₹50,000 as lumpsum now, and set up a ₹25,000/month SIP for the next 2 months with the rest. You get exposure to both strategies and reduce your timing risk.

Does the investment period change which strategy wins? Yes, significantly. Over very short periods (1-2 years), lumpsum and SIP can give very different results depending on market direction. Over longer periods (10+ years), the gap tends to narrow as compounding smooths things out.

Should I switch from SIP to lumpsum if markets crash? If you have extra cash during a crash, absolutely deploy it as lumpsum – it’s a great buying opportunity. But don’t stop your existing SIP. Keep both going.

The Bottom Line

There’s no universally “better” strategy. The calculator shows you the truth for any specific scenario – and the truth is that both strategies build wealth. The difference between them is usually smaller than the difference between investing and not investing at all.

Pick the strategy that fits your actual financial situation. If you have a lump sum available, invest it. If you have monthly income, start a SIP. If you have both, do both.

And stop letting the debate paralyse you into doing nothing. That’s the only guaranteed way to lose.

Disclaimer:

This calculator is provided for educational and informational purposes only. It compares SIP and lumpsum strategies using mathematical projections based on your inputs and assumes a constant rate of return for both strategies throughout the investment period.

Important points:

  • Real market returns are never constant. They go up and down every year, sometimes dramatically.
  • This calculator does not account for expense ratios, taxes, exit loads, or any mutual fund fees.
  • The comparison assumes the same total investment amount for both strategies – make sure you’re comparing fairly.
  • Past market performance does not guarantee future results.
  • Nothing here should be treated as a recommendation to choose one strategy over the other.
  • Mutual fund investments carry market risk. You could lose money.
  • This calculator has no connection to SEBI, AMFI, or any investment company.

For guidance on which strategy suits your personal financial situation, please consult a SEBI-registered investment advisor.

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Page last updated: January 2026 | Free to use | No sign-up needed