₹10 Lakh Lumpsum Vs ₹10,000 SIP: Which Builds A Bigger Corpus In 20 Years?

When it comes to long-term investing, one common question is whether to opt for a systematic investment plan (SIP) or to make a lumpsum investment. Both approaches have their own merits and outcomes. Using an example with identical expected returns, here is a comparison to highlight how these two strategies play out over a 20-year horizon.

SIP Investment Scenario

In the first case, Person A invests ₹10,000 every month through SIP for 20 years. With an annualised return of 12%, the invested amount of ₹24,00,000 grows to ₹99,91,479. Out of this, the returns generated amount to ₹75,91,479.

This example shows how disciplined monthly investing not only builds a large corpus but also benefits from the power of compounding. Regular contributions help investors participate across market cycles, averaging the cost of investment over time.

Lumpsum Investment Scenario

In the second case, Person B invests a lumpsum of ₹10,00,000 at the start and leaves it invested for 20 years at the same annualised return of 12%. The total value after 20 years becomes ₹96,46,293, with returns of ₹86,46,293 on the initial investment.

A lumpsum investment benefits significantly from compounding right from the start, as the entire amount is exposed to growth over the entire period.

Comparative Insights

The difference in corpus between the two approaches lies in the timing and flow of investments. A ₹10 lakh lumpsum grows to about ₹96.4 lakh in 20 years, while a ₹10,000 monthly SIP builds a corpus of nearly ₹99.9 lakh in the same period at 12% returns. 

The SIP delivers a slightly higher final corpus because contributions continue throughout the 20 years, steadily adding capital that compounds over time. In contrast, the lumpsum relies on one-time exposure to compounding, which generates higher returns on the initial investment but does not benefit from fresh inflows. This shows how the structure of investments influences long-term outcomes.

This shows how the structure of investments influences long-term outcomes, and you can check the difference yourself using this SIP calculator.

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Conclusion 

The choice between SIP and lumpsum depends on the availability of funds and the preferred style of investing. Both approaches ultimately demonstrate how consistent investment and compounding can generate substantial wealth over the long term.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.