Lump Sum vs SIP Comparison
See how a one-time lump sum investment compares against disciplined monthly SIP investing over the same period.
Side-by-side bar chart comparing the final wealth from Lump Sum vs SIP investments over the chosen time horizon.
How This Tool Works
Operation: The SIP (Systematic Investment Plan) Comparison Calculator uses the compound interest formula adapted for recurring periodic investments. Unlike a lump sum calculator, SIP calculations apply the compounding effect to each monthly instalment individually based on how long that specific instalment remains invested. The formula used is:
M = P × ((1 + r)n − 1) / r × (1 + r)
Where:
- M — Maturity amount
- P — Monthly SIP investment amount
- r — Expected monthly return rate (annual return ÷ 12, expressed as a decimal)
- n — Total number of monthly instalments (investment horizon in years × 12)
The tool compares two different SIP scenarios side-by-side — varying monthly amounts, expected return rates, or investment durations — and displays the maturity gap, total investment difference, and projected corpus for each scenario.
Key Benefits of Using the SIP Calculator
- 100% client-side computation: Your investment amounts, return expectations, and financial projections are never transmitted to any server. All calculations are performed locally using JavaScript's floating-point arithmetic, ensuring your financial data remains completely private.
- Side-by-side scenario comparison: Unlike basic SIP calculators that show a single scenario, this tool lets you compare two investment strategies simultaneously — making it easy to visualise the impact of increasing your monthly SIP by ₹1,000 or extending your investment horizon by 5 years.
- Visual corpus projection: The results include a chart overlay showing the corpus growth trajectory for each scenario, helping you understand not just the final value but how the wealth accumulates over the investment period.
Practical Real-World Use Cases
- Young professionals starting their investment journey: A 25-year-old deciding between a ₹5,000/month SIP and a ₹7,500/month SIP in an equity fund can compare the 20-year projected corpus difference — potentially ₹30–40 lakh — to make an informed commitment.
- Investors comparing fund categories: An investor evaluating a large-cap fund (expected 10% return) versus a mid-cap fund (expected 12% return) can input the same monthly amount and see how a 2% return difference compounds into a significant corpus gap over 15 years.
- Retirement planners adjusting timelines: A 40-year-old with a ₹15,000/month SIP can compare retiring at 55 versus 60, seeing exactly how 5 additional years of compounding transforms the retirement corpus.
Frequently Asked Questions (FAQ)
Are the returns guaranteed?
No. The calculator uses expected annualised returns for projection purposes only. Actual mutual fund returns vary based on market performance. The tool is for educational planning, not a promise of future returns.
Does this account for expense ratios or exit loads?
No. The calculator assumes the gross return before fund expenses. To factor in expense ratios (typically 0.5–1.5% for active equity funds), subtract the expense ratio from your expected return rate before entering it.
What is the difference between SIP and lump sum investing?
SIP spreads your investment across time, averaging the purchase cost (rupee cost averaging) and reducing timing risk. Lump sum investing puts all capital to work immediately, performing better in consistently rising markets.