SIP vs Lumpsum: Which Is Better for You?
Updated 5 November 2026
A SIP invests a fixed amount every month; a lumpsum invests all the money at once. If markets rise steadily, lumpsum usually ends higher because all the money is invested from day one. SIP is better when you earn monthly or worry about investing just before a fall.
The same ₹12 lakh, two ways
| SIP: ₹10,000 a month for 10 years | Lumpsum: ₹12 lakh once, for 10 years | |
|---|---|---|
| Money put in | ₹12,00,000 | ₹12,00,000 |
| Value at 12% a year | ₹23,23,391 | ₹37,27,018 |
The lumpsum wins on paper because the full amount compounds for all 10 years. But most people do not have ₹12 lakh on day one; they have ₹10,000 a month. For them, SIP is the realistic choice.
When SIP makes more sense
- You invest from your monthly salary.
- You want to avoid putting everything in just before a market fall (rupee cost averaging).
- You want discipline: the money moves before you can spend it.
When lumpsum makes more sense
- You already have a large sum, such as a bonus or a maturing FD.
- You can stay invested for 7+ years and ignore short-term falls.
- A middle path: park the lumpsum in a liquid fund and move it into equity through an STP (systematic transfer plan) over 6 to 12 months.
Try it
Open the mutual fund calculator and enter your own numbers. Words you don't know are explained in the money glossary.