Worked example
₹10,000 a month for 10 years puts in ₹12,00,000. As a SIP at an assumed 12% it grows to ₹23,23,391. The same ₹12,00,000 put in on day one grows to ₹37,27,018, because every rupee has more years to grow.
- Money put in
- ₹12,00,000
- SIP: estimated value
- ₹23,23,391
- Lump sum: value
- ₹37,27,018
- The other choice is ahead by
- ₹14,03,627
| Year | SIP: estimated value | Lump sum: value | Difference |
|---|---|---|---|
| 1 | ₹1,28,093 | ₹13,44,000 | -₹12,15,907 |
| 2 | ₹2,72,432 | ₹15,05,280 | -₹12,32,848 |
| 3 | ₹4,35,076 | ₹16,85,914 | -₹12,50,837 |
| 4 | ₹6,18,348 | ₹18,88,223 | -₹12,69,875 |
| 5 | ₹8,24,864 | ₹21,14,810 | -₹12,89,946 |
| 10 | ₹23,23,391 | ₹37,27,018 | -₹14,03,627 |
How to read the result
- Enter the monthly amount you could put in as a SIP.
- Enter the yearly return you assume for both choices, and the years.
- The lump sum is that monthly amount × 12 × the years, invested on day one.
- Compare the two values and see the gap grow year by year in the table.
How both values are worked out
The SIP side uses the same formula as the SIP calculator, and the lump sum side uses the formula of the lumpsum calculator, so the numbers match those pages.
SIP: FV = P × [((1 + r)n − 1) ÷ r] × (1 + r) · Lump sum: FV = A × (1 + R) y
P is the monthly amount, r the monthly return (yearly ÷ 12), n the number of months, A the lump sum, R the yearly return and y the years.
Frequently asked questions
Is a SIP or a lump sum better?
Neither wins every time. With the same total of ₹12 lakh and a steady assumed 12% return, the lump sum reaches ₹37.27 lakh and the SIP ₹23.23 lakh, because the lump sum is invested for all 10 years. But most people do not have the whole amount on day one, and a SIP lets you invest from your salary.
Why does the lump sum come out ahead here?
The calculator assumes a steady return. When returns are positive, money invested earlier grows for longer. At a 12% assumed return the lump sum is ahead by ₹14,03,627.
When can a SIP do better than a lump sum?
Real markets rise and fall. If the market falls soon after a lump sum goes in, the SIP buys at lower prices for the next months. This calculator cannot show that, because it uses one steady return. It does show the other side: at a low 4% assumed return the gap is only ₹2,98,887, and at 0% both just give back the ₹12 lakh you put in.
What if I have a lump sum today but want to invest slowly?
Some people keep the lump sum in a safe place and move a part into a SIP every month. The calculator on our SIP page shows the SIP part; the safe part earns the deposit rate you choose on the SIP vs FD page.
Is the return guaranteed?
No. The return is assumed, not predicted, and the result is an illustration, not investment, tax or legal advice.