The textbook answer
Mathematically, if markets only ever go up, a lumpsum at the start always wins - your full amount enjoys compounding for the longest time.
But markets don't only go up. They bounce. SIPs let you average out your purchase price across the highs and lows, which is called rupee-cost averaging.
When SIP is the right choice
If your money is your monthly salary - you don't have a lumpsum lying around. SIP is the natural fit.
If markets feel expensive or volatile, SIP gives you peace of mind: you're buying in pieces, not betting the farm on one day.
When lumpsum makes sense
Got a bonus, inheritance or sold an asset? A lumpsum, deployed when markets aren't at all-time highs, gives compounding a head start.
Worried about timing? Split the lumpsum into 3–6 tranches across months - a 'STP' (Systematic Transfer Plan).
- Default to SIP - it matches how income arrives.
- Never sit on cash 'waiting for a dip'. Time in the market beats timing it.
- Combine: monthly SIP + occasional lumpsum on big market drops.
Frequently asked questions
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