SIP vs Lumpsum Calculator
Lumpsum wins on paper under steady returns; SIP wins on nerves in real markets
SIP vs Lumpsum Investing Comparator
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Years
Months
Days
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%
Lumpsum: invested fully on day one
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SIP: same total, spread monthly
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Lumpsum's edge under steady returns
0
but SIP reduces timing/volatility risk -- see note
In today's money (inflation-adjusted)
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real purchasing power after assumed inflation
Under a STEADY assumed return, lumpsum wins by construction
If the market simply compounds smoothly at one fixed rate, investing everything on day one always beats spreading the same money over time — this is arithmetic, not a market prediction, since more money is earning returns for longer.
SIP's real job is reducing volatility risk, which this model can't show
Markets don't move in a straight line — SIP's actual advantage is averaging your purchase price across ups and downs, reducing the risk of investing a large lumpsum right before a downturn. A single constant-return assumption is mathematically blind to this benefit by design.
The honest framing: lumpsum for expected value, SIP for peace of mind
If you already have the lumpsum and a long horizon, historical data generally favors investing it immediately; SIP remains the better behavioral choice if you don't have the lumpsum yet, or if market-timing anxiety would otherwise keep you from investing at all.
This model deliberately uses ONE constant annual return for both scenarios to isolate the pure timing-of-capital effect — it will always mathematically favor lumpsum, which is expected and not a recommendation either way. It does NOT model real market volatility or sequence-of-returns risk, which is SIP's actual, real-world advantage (dollar-cost-averaging reduces the risk of a bad entry point) and cannot be shown with a single fixed-return assumption. Treat the "lumpsum edge" number here as what smooth, un-volatile compounding would produce, not a market forecast. Not investment advice.