Lump Sum vs SIP Calculator
Compare investing the same amount all at once or as a monthly SIP, at the return you enter.
Lump sum ahead by
Year-wise comparison
| Year | Lump sum value | SIP invested | SIP value |
|---|---|---|---|
| 1 | ₹6,76,095 | ₹1,20,000 | ₹1,28,093 |
| 2 | ₹7,61,841 | ₹2,40,000 | ₹2,72,432 |
| 3 | ₹8,58,461 | ₹3,60,000 | ₹4,35,076 |
| 4 | ₹9,67,336 | ₹4,80,000 | ₹6,18,348 |
| 5 | ₹10,90,018 | ₹6,00,000 | ₹8,24,864 |
The lump sum is fully invested from day one; the SIP column shows how much has gone in so far.
How it works
Both options compound monthly at i = expected yearly return ÷ 12 ÷ 100, over n = years × 12 months.
Lump sum value = T × (1 + i)n
The SIP invests P = T ÷ n at the start of every month (the same formula as our SIP calculator):
SIP value = P × ((1 + i)n − 1) ÷ i × (1 + i)
Difference = Lump sum value − SIP value. At 0% return both equal T.
Worked example
You have ₹1,20,000 and assume 12% a year for 1 year.
- Monthly return i = 12 ÷ 12 ÷ 100 = 0.01; (1 + i)12 = 1.126825
- Lump sum value = ₹1,20,000 × 1.126825 = ₹1,35,219.00
- SIP of ₹10,000 a month: F = (1.126825 − 1) ÷ 0.01 × 1.01 = 12.809328
- SIP value = ₹10,000 × 12.809328 = ₹1,28,093.28
- The lump sum is ahead by ₹7,125.72 after one year.
Frequently asked questions
What does this calculator compare?
It takes one amount of money and invests it two ways: all at once today (lump sum), or spread evenly as a monthly SIP over the same period. It then shows what each could be worth at the end, at the same return rate.
Why does the lump sum usually end higher?
With a steady positive return, money invested earlier has longer to grow. In a SIP, much of the money is still waiting to be invested, so on average it grows for only about half the period. At 0% return, both end at the amount invested.
So is a lump sum always better?
Not necessarily. Real returns are not steady. If markets fall soon after a lump-sum investment, it can end lower than a SIP that bought more units at lower prices. A SIP also suits people who earn and invest month by month rather than having a lump sum ready.
How are the two values calculated?
Both compound monthly at the yearly return ÷ 12, so the comparison is fair. Lump sum = amount × (1 + i)^n. The SIP invests amount ÷ n at the start of each month and uses the same formula as our SIP calculator.
Why is the lump sum value different from the lumpsum calculator?
Our lumpsum calculator compounds once a year, a common way to show long-term returns. Here both options compound monthly so they are compared on the same basis, which gives a slightly higher lump-sum value at the same rate.
What return rate should I enter?
Enter a rate you think is realistic for the investment, and try a lower one too. The rate is the same for both options, so the gap between them comes only from timing.
What about keeping the money aside while the SIP runs?
This comparison ignores any interest the SIP money could earn while it waits, for example in a savings account. Including it would narrow the gap a little.