Formulas used by this calculator
SIP Formula
FV = P × [({1 + i}n - 1) / i] × (1 + i)
Lumpsum Formula
FV = P × (1 + r/100)n
P: Principal / Monthly amount | i / r: Return rate | n: Time horizon
About SIP vs Lumpsum Investments
A Systematic Investment Plan (SIP) allows investors to contribute small, fixed amounts regularly, benefiting from rupee cost averaging. A Lumpsum investment puts a single lump sum of money to work immediately, maximizing compound growth when held over long periods.
How to use this calculator
- Select either the SIP (Monthly) or Lumpsum (One-time) investment mode.
- Enter your planned investment amount.
- Specify your expected annual rate of return.
- Enter the investment period in years to view total invested capital, estimated returns, and final value.
Frequently asked questions
What is the difference between SIP and Lumpsum investment?
SIP allows you to invest a fixed amount regularly (e.g., monthly), leveraging rupee cost averaging. Lumpsum is a one-time investment where your entire capital is invested at once.
How is Lumpsum return calculated?
Lumpsum returns are calculated using the compound interest formula: A = P × (1 + r/100)^n, where 'P' is the initial investment, 'r' is the annual return rate, and 'n' is the period in years.
Which investment mode is better, SIP or Lumpsum?
SIP is generally ideal for regular income earners as it mitigates market timing risk. Lumpsum is effective when you have idle capital during market corrections or low valuation phases.