SIP vs Lump Sum Calculator

You have a sum of money. Should you invest it all at once, or spread it out month by month? This compares both routes over the same period at the same expected return.

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How to use this calculator

  1. Enter total amount to invest — The same money is used for both routes.
  2. Enter investment period
  3. Enter expected annual return
  4. Enter spread the sip over — How many years you take to invest the whole amount. The rest of the period it simply stays invested.
  5. Read the result — it updates as you type.

The formula used

Lump sum: FV = P × (1 + i)n  ·  SIP: FV = M × [((1 + i)m − 1) ÷ i] × (1 + i), then compounded for the rest

P
The whole amount, invested today
M
The same amount ÷ number of SIP months
i
Monthly return
n / m
Total months / SIP months

Both routes use exactly the same money and the same rate. The only difference is timing — and with a constant positive return, time in the market is the whole game.

Worked example

₹12,00,000 over 10 years at 12%, with the SIP spread over 3 years.

  • Lump sum route₹12,00,000 invested today
  • SIP route₹33,333 a month for 36 months
  1. Lump sum: ₹12,00,000 × 1.01¹²⁰ = ₹39,60,464
  2. SIP: ₹33,333/month for 3 years = ₹14,54,905, then compounded 7 more years = ₹33,58,331

The lump sum ends about ₹6 lakh ahead — but only because this model assumes the market rises smoothly. In a falling market the SIP would buy at lower prices and could win.

What this comparison can and cannot tell you

With a constant return, investing everything immediately always wins. That is arithmetic, not insight: more money compounds for more months.

The part the maths leaves out

Real markets do not deliver a constant return. If prices fall 20% in the six months after you invest a lump sum, you feel it all at once. Spreading the same money over a year or two buys some units cheaply and reduces the damage of bad timing. The cost of that comfort is the gap shown above.

A practical middle path

Many people invest a lump sum in three to six tranches rather than all at once or over several years. Set the "spread" field to 1 year to model that.

One thing that is not a trade-off

If the money arrives monthly — from a salary — there is no decision to make. A SIP is simply how you invest income you do not yet have.

Tips and common mistakes

Getting more out of it

  • Set the spread to one year to model the common middle path of investing a lump sum in three or four tranches.
  • Read the gap as the price of protection against bad timing, not as proof that one method is better.

Mistakes to avoid

  • Concluding lump sum is always superior. At a constant positive return it must be — that is arithmetic, not insight.
  • Applying this to salary income. If the money arrives monthly there is no decision to make.
  • Ignoring how you would feel if the market fell 20% the week after investing everything.

Frequently asked questions

Which is actually better, SIP or lump sum?

For a steady rising market, the lump sum. For peace of mind and protection against bad timing, spreading it out. The honest answer depends on something nobody knows in advance — what the market does next.

Why does the SIP route lose in this calculator?

Because a fixed return rate is assumed. Money invested later earns for fewer months. Introduce a market fall and the result can flip — this calculator cannot model that.

What is the sensible spreading period?

Common practice is 3 to 12 months for a lump sum you already hold. Beyond a couple of years you are mostly just sitting in cash.

Does this include tax?

No. Both routes are shown before tax. Note that a SIP creates many small purchase dates, which can complicate holding-period calculations at sale.

SIP Calculator

See what a monthly SIP could grow into over time.

Investment Lump Sum Calculator

Growth of a one-time investment at an expected annual return.

Investment Investment Return Calculator

Combine a starting amount with regular contributions.

Investment Step-Up SIP Calculator

SIP where you increase the monthly amount every year.

Investment Mutual Fund Return Calculator

Returns on a mutual fund investment using NAV or amounts.

Mutual Funds CAGR Calculator

Compound Annual Growth Rate between a start and end value.

Investment
Disclaimer: These calculators are for educational and informational purposes only. Results are estimates based on the inputs provided and should not be considered financial, investment, tax, or legal advice.