Lump sum vs SIP: invest now or spread it out.

01How it works

In plain words.

The lump sum is invested on day one. The spread route invests equal parts at the start of each month for the chosen months, and the money not yet invested earns nothing. Both then compound at the same monthly rate until the end of the holding period.

02Worked example

The default numbers, by hand.

Rs 12 lakh at 12% for 10 years: the lump sum ends near Rs 37.3 lakh; spread over 12 months it ends near Rs 35.4 lakh, because on average the money waits about six months before it is invested.

03Key concepts

What to know before you use it.

What the research found

Vanguard’s 2012 study of rolling 10 year periods in the US, UK and Australia found a lump sum ahead of spreading over 6 to 36 months in about two thirds of periods, mainly because markets rose more often than they fell and cash earned less.

Why some still spread

Spreading lowers the chance of investing everything just before a fall, and the regret that comes with it. It does so at the cost of time in the market. A constant return cannot show that trade off; real prices that fall during the spreading months can.

Good to know

• Some investors split the decision: part at once and the rest over 6 to 12 months.
• Money waiting to be spread can sit in a liquid fund; this calculator assumes it earns nothing.
• For a salary, a SIP is simply how the money arrives, so the question does not arise.

04Assumptions

What the calculator assumes.

• One constant return; the spread route invests at the start of each month.
• Uninvested money earns nothing.
• No tax or costs.

Sources, checked 12 Oct 2026

1. Vanguard research, Dollar-cost averaging just means taking risk later (Shtekhman, Tasopoulos, Wimmer, July 2012): lump sum ahead in about two thirds of rolling 10 year periods in the US, UK and Australia

05Questions

Asked about the Lump sum vs SIP.