Are SIPs Always More Profitable than Lump Sums?

Do SIPs Always Generate Higher Returns?

To evaluate if SIPs are indeed foolproof, we looked for time periods when SIPs have delivered lower returns than lump sums. For example, if you had started your investment in the NIFTY 50 on October 26, 2008, and stayed invested for seven years (till October 26, 2015), your returns under SIPs would have been 13.46% against 19.8% under the lump-sum mode of investment during the same period. See the table below.

When Lumpsum Scores Over SIP
Investment PeriodOct 26, 2008 to Oct 26, 2015
Lumpsum Returns (CAGR)19.8%
SIP Returns (XIRR)13.46%

Now let’s look at another seven-year period: from January 6, 2008, to January 6, 2015. Here, a monthly SIP has generated a return of 14.22%, while a lump-sum investment yielded a meagre 4.9%. So, SIP gave a better return in this scenario.

When SIP Did Better Than Lumpsum
Investment PeriodJan 6, 2008 to Jan 6, 2015
Lumpsum Returns (CAGR)4.9%
SIP Returns (XIRR)14.22%

What does it show? Whether or not SIPs will deliver better returns than lump sums depends on the market condition when you invest your money. Now let’s try to understand in what market conditions SIPs will deliver a better return than lump sums and vice versa.


The analysis above shows that SIPs don’t guarantee better returns than lump sums; it all depends on the market movement. Does it mean you should shun SIPs and go for lump sums at your own convenience?

Actually, no. When it comes to investing in equity, always go with SIPs. While it’s true that SIPs may at times underperform lump sums, you have no way to know when they will and when they won’t. We can tell such a thing only in hindsight.

Also understand that the benefit of SIPs doesn’t lie in their outperforming lump sums. It actually lies in the fact that if you make a lump-sum investment at the wrong time, your return experience can be really bad. So, SIPs help you avoid that negative outcome.

Apart from that, SIPs instil discipline in investing and free you from having to decide when to invest and when not. Such decisions anyway wouldn’t be very rewarding.

In addition to that, if you want to calculate the potential returns of your SIP investments conveniently, you can use the SIP Return Calculator on our App. This tool allows you to estimate the growth of your investments based on various parameters such as the investment amount, duration, and expected rate of return. By utilizing the SIP Calculator, you can make informed decisions and monitor the progress of your investments effectively.

Did you know that you can invest in any Indian mutual fund through Regnum Digital app, If you have not started your mutual fund investments yet, now is the time to start them with Regnum Digital. On the Regnum Digital and Regnum Wealth website, you can also track all your investments in one place.

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