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Goal-Based Investing

SIP vs Lumpsum: What's Right for You?

Debating between investing a large amount at once or small amounts regularly? We break down the pros and cons.

SIP or Lumpsum?

One of the most common questions we get is: "I have ₹5 Lakhs. Should I invest it all now or do an SIP?"

Understanding the Difference

SIP (Systematic Investment Plan)

  • Best for: Salaried individuals with monthly cash flow.
  • Benefit: Rupee Cost Averaging. You buy more units when markets are low and fewer when high.
  • Psychology: Removes the fear of timing the market.

Lumpsum

  • Best for: Windfall gains (bonuses, property sale).
  • Benefit: Power of compounding starts immediately on the whole amount.
  • Risk: If the market crashes tomorrow, your portfolio value drops significantly.

The Verdict

If you are new to the market, SIP is almost always the safer, more disciplined choice. It builds a habit of saving.

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