SIP vs Lump sum: Which scheme can generate Rs 1 crore corpus faster with Rs 6,000 monthly investment?
Can you generate Rs 1 crore with Rs 6,000 monthly investment? Which works better, SIP or lump sum? Find out which option grows your money faster and helps you achieve your goal smoothly.
Imagine you want to generate Rs 1 crore, but you have only Rs 6,000 to invest each month. Should you go for a Systematic Investment Plan (SIP), invest small amounts regularly, or put in a lump sum at once? Which one will grow your money faster? Let’s find out.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is SIP?
A Systematic Investment Plan (SIP) is a way to invest in mutual funds by putting in a fixed amount of money regularly, like monthly or quarterly, instead of investing a large sum at once. It helps you invest in a disciplined way, take advantage of market ups and downs, and benefit from compounding in the long run.
What is Lump sum?
A lump sum investment means investing a big amount of money at once instead of small amounts regularly. For example, if you have Rs 1 lakh, you invest the entire amount at one time in mutual funds or any other investment option. It can give higher returns if the market performs well.
SIP vs Lump Sum: Which is better?
Investment approach
SIP: You invest a fixed amount regularly (monthly/quarterly).
Lump Sum: You invest a large amount at once.
Flexibility
SIP: You can start small and increase the amount later.
Lump Sum: Requires a large sum upfront, limiting flexibility.
Compounding benefits
SIP: Gains accumulate gradually over time.
Lump Sum: The full amount starts compounding immediately, which can lead to higher growth.
SIP calculation conditions
Target corpus: Rs 1 crore
Investment amount: Rs 6,000 monthly
Annualised return: 12 per cent
How long it will take to build Rs 1 crore with Rs 6,000 monthly SIP
It will approximately take 25 years to generate Rs 1 crore with Rs 6,000 monthly investment.
What will be your retirement corpus in 25 years with Rs 6,000 monthly SIP
The investment amount during this period will be Rs 18,00,000, the estimated capital gains will be Rs 84,13,239, and the estimated retirement corpus will be Rs 1,02,13,239.
Lump sum calculation conditions
Target corpus: Rs 1 crore
Investment amount: Rs 18,00,000 one-time
Annualised return: 12 per cent
How long it will take to build Rs 1 crore with one-time investment?
It will approximately take 16 years to generate Rs 1 crore with Rs 18,00,000 one-time investment.
What will be your retirement corpus in 16 years with Rs 18,00,000 one-time investment?
The investment amount during this period will be Rs 18,00,000, the estimated capital gains will be Rs 92,34,709, and the estimated retirement corpus will be Rs 1,10,34,709.