The lump sum is invested on day one, so every rupee compounds for the full period. SIP instalments arrive gradually, so the average rupee compounds for roughly half the period — which is why, at the same assumed return, an equal-sized lump sum ends higher.

That mathematical edge assumes you actually have the full amount available and that returns are steady. In volatile markets a SIP averages your purchase price and removes the risk of investing everything at a peak.

Given: ₹10,000/month for 10 years (₹12,00,000 total) vs ₹12,00,000 lump sum, both at 12% p.a.

SIP: FV = 10,000 × (3.30039 − 1)/0.01 × 1.01 ≈ ₹23,23,391

Lump sum: FV = 12,00,000 × 3.30039 ≈ ₹39,60,468

The lump sum ends about ₹16.4 lakh higher — because it compounds for the full 120 months.

• This comparison assumes a constant return; in a falling-then-rising market SIP can outperform.
• The realistic question is usually affordability — most investors do not have the full amount upfront.
• SIP provides rupee-cost averaging and behavioural discipline that this arithmetic cannot capture.
• Taxes, exit loads and expense ratios are excluded from both sides.

So is lump sum always better?
Mathematically yes at a constant return — but only if you have the money now and can tolerate timing risk.

When does SIP win?
When markets fall early and recover later, SIP buys more units cheaply and can finish ahead.

Can I do both?
Yes — many investors deploy a lump sum and continue a monthly SIP alongside it.