Nayra Jain
Dec 1, 2025
Longer investment durations allow compounding to work better. SIPs gain from consistent monthly contributions, whereas lump sum relies entirely on initial capital and market performance.
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A monthly SIP of Rs 8,000 at 12% per annum can reach Rs 50 lakh in 17 years. Regular contributions harness the power of compounding more efficiently than a one-time investment.
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Investing Rs 2 lakh as a lump sum at the same return rate may take 29 years to reach Rs 50 lakh, demonstrating slower corpus growth compared to disciplined SIP investing.
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SIP investors contribute more over time, but the cumulative effect accelerates wealth creation. After two years, Rs 1,92,000 invested via SIP almost equals a Rs 2 lakh lump sum.
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Monthly SIPs allow gradual increase in contributions, pause options, or adjustments based on income. Lump sum investments lock capital upfront, offering less adaptability to financial changes.
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SIP investors benefit from rupee-cost averaging, reducing market timing risks. Lump sum investments are more vulnerable to short-term market downturns.
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A mix of lump sum and SIP investments can optimise returns. Lump sum handles immediate growth while SIP builds corpus steadily, balancing risk and long-term wealth accumulation.
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Even small contributions invested consistently over years can grow multi-fold. Experts emphasise that compounding significantly enhances final returns when investments are held longer.
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Investors should assess their risk appetite, investment horizon, and financial goals. Consulting certified financial advisors helps in finalising a realistic strategy to reach the Rs 50 lakh target efficiently.
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This content is for information only. Investors should consult certified financial advisors to assess risk, returns, and personal financial goals before making investment decisions.
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