Put the same money to work two ways. A lump sum compounds from day one; a SIP spreads it over time, so later instalments compound for less time. The parking rate estimates what the undeployed balance may earn.
Comparison snapshot
At 12% for 10 years
At a steady 12.0%, a lump sum compounds longer. A SIP may benefit when prices fall during the spread; this chart assumes a steady return path and shows the cost of waiting, not the benefit of averaging.
Value of the two routes
Year by year
| Year | Lump sum | SIP route (before parking) |
|---|---|---|
| Year 1 | ₹13,52,190 | ₹12,80,933 |
| Year 2 | ₹15,23,682 | ₹14,43,387 |
| Year 3 | ₹17,16,923 | ₹16,26,445 |
| Year 4 | ₹19,34,671 | ₹18,32,719 |
| Year 5 | ₹21,80,036 | ₹20,65,153 |
| Year 6 | ₹24,56,519 | ₹23,27,066 |
| Year 7 | ₹27,68,067 | ₹26,22,197 |
| Year 8 | ₹31,19,128 | ₹29,54,757 |
| Year 9 | ₹35,14,711 | ₹33,29,494 |
| Year 10 | ₹39,60,464 | ₹37,51,757 |
Assumptions & formula
Lumpsum = T × (1 + i)^n. SIP = Σ(T ÷ k) × (1 + i)^(n − m), where i is monthly return, n is total months and k is spread months. Parking interest is earned on the undeployed balance and invested after the spread.- The investment return is constant; actual market price paths can make SIP and lump-sum outcomes differ.
- Monthly SIP instalments are invested at the beginning of each month.
- Parking interest is estimated as simple interest on the undeployed balance during the spread; taxes and fees are not deducted.
Calculators are for information and planning. Outputs depend on the inputs and assumptions you enter and are not a recommendation to buy, sell or hold any security or product. Streetgains Technologies Private Limited is a SEBI Registered Research Analyst (INH000017082); it is not a loan provider, tax adviser or mutual fund distributor.