SIP vs Lumpsum: The Ultimate Comparison
When investing in mutual funds, you have two options: SIP (Systematic Investment Plan) or Lumpsum. Let's understand both.
What is SIP?
SIP allows you to invest a fixed amount regularly (monthly/quarterly) in mutual funds. It's like a recurring deposit but for mutual funds.
Benefits of SIP:
- ✅ Rupee cost averaging
- ✅ No need to time the market
- ✅ Disciplined investing
- ✅ Start with just ₹500/month
Calculate your SIP returns: SIP Calculator
What is Lumpsum?
Lumpsum means investing a large amount at once. Ideal when you have surplus funds.
Benefits of Lumpsum:
- ✅ Higher returns in bull markets
- ✅ Power of compounding starts immediately
- ✅ One-time investment decision
Comparison Table
| Factor | SIP | Lumpsum | |--------|-----|---------| | Investment | Regular | One-time | | Market Timing | Not required | Important | | Risk | Lower | Higher | | Minimum Amount | ₹500 | ₹5,000 |
Which Should You Choose?
Choose SIP if:
- You have a regular income
- You're a beginner investor
- You want to reduce risk
Choose Lumpsum if:
- You have a large corpus (bonus, inheritance)
- Market is at a low
- You understand market trends
Calculate Your Returns
Tags
#SIP#Mutual Funds#Investment#Lumpsum
