SIP vs Lumpsum
Two ways to invest in mutual funds: SIP (Systematic Investment Plan) for regular monthly investing, and Lumpsum for one-time investments.
SIP (Systematic Investment Plan)
SIP auto-debits a fixed amount from your bank every month (or week/quarter).
Advantages:
- Rupee cost averaging — buy more units when markets are low, fewer when high
- No timing needed — removes the "is now a good time?" anxiety
- Disciplined habit — automates your investing
- Start small — ₹500/month is enough
| Month | NAV | Units Bought (₹5,000) |
|---|---|---|
| Jan | ₹50 | 100 units |
| Feb | ₹40 | 125 units |
| Mar | ₹45 | 111 units |
| Average | ₹43.48 | 336 total units |
Lumpsum
Investing a large amount at once.
When lumpsum makes sense:
- You received a bonus, inheritance, or windfall
- Markets have crashed significantly (but this requires conviction)
- You're investing in a debt fund for a fixed period
- Short-term parking of emergency funds
Which Is Better?
Historically, lumpsum beats SIP about 65% of the time (because markets trend upward). But SIP gives psychological comfort and works better for salaried investors who earn monthly.
The real answer: Most people should SIP their monthly savings AND lumpsum any windfalls. Use our SIP Calculator to project your returns.