SIP + Lumpsum Investment Calculator
Investment Results
Total Invested: $0
Total Returns: $0
Final Amount: $0
XIRR: 0 %
Investment Parameters Explained
| Parameter | Description |
|---|---|
| Monthly SIP Amount | Fixed monthly contribution made through a Systematic Investment Plan (SIP). |
| Yearly SIP Increase | Annual percentage increment applied to your monthly SIP to adjust for inflation or rising income. |
| Initial Lumpsum | One-time capital invested at the beginning of the investment period. |
| Yearly Additional Lumpsum | Recurring annual lump sum contributions, typically from bonuses or surplus income. |
| Investment Period | Total duration for which the funds are invested, typically expressed in years. |
| Expected Annual Return | Anticipated yearly return rate, based on historical performance or market assumptions. |
Systematic Investment Plan (SIP)
An SIP enables disciplined investing by allocating a fixed amount at regular intervals, typically monthly, thereby averaging cost and minimizing timing risks.
Lumpsum Investment
A lumpsum investment involves deploying a large capital amount at once. It is suitable when funds are readily available and can be advantageous during market dips.
Compounding Effect
Compounding refers to the reinvestment of returns over time, allowing investments to grow exponentially when returns generate additional earnings.
SIP Step-Up Strategy
This strategy allows annual increments in SIP contributions, enhancing long-term wealth creation and offsetting inflation’s impact.
Tax Implications
Returns are subject to taxation, varying by:
- Holding duration (short vs. long term)
- Asset type (equity, debt, hybrid)
- Local tax laws
Optimal Investment Strategy
SIP is ideal for:
– Regular income earners
– Long-term financial goals
– Managing market volatility
Lumpsum is ideal for:
– Availability of idle capital
– Market corrections or dips
– Mid- to short-term goals
Market Timing Considerations
Lumpsum investing carries timing risks. SIP mitigates this by averaging investment costs. Combined strategies often deliver balanced risk-adjusted returns.
- Entry timing significantly affects returns
- SIP reduces timing risk by 40–60%
Inflation Mitigation
The SIP step-up feature helps maintain real purchasing power:
- Annual increases match inflation trends
- Maintains investment effectiveness
- Compounds higher contributions over time
Long-Term Growth Illustration
Historical 30-year data suggests:
| SIP Only (15% CAGR) | ₹1.2 Cr |
| SIP + Lumpsum | ₹1.8 Cr |
| SIP with 5% Step-Up | ₹2.4 Cr |
*Assumption: ₹10,000 monthly SIP + ₹1L annual lumpsum over 20 years.