Rs 15 Lakh Lump Sum vs Rs 15,000 SIP: Which investment builds Rs 4,60,00,000 corpus faster? See comparisons with examples

The investor doesn't have to commit to make periodic investments They get compounding on the entire sum from Day 1. In the long term, their one-time investment may help them achieve their financial goals. 

Investor's sum gets immediate market exposure They can diversify their investment from Day 1 Investor can make a good use of funds lying idle 

It provides rupee-cost averaging as an investor buys more net asset value (NAV) units when the market is down and fewer units when the market is high. It averages out the cost over time and reduces the market volatility impact. It instills a discipline as the investor becomes committed to investing.

Since an investor buys NAVs at different prices, they don't need to time the market. An investor can start an SIP investment with a small amount such as Rs 100, Rs 250, or Rs 500.

It depends on an individual's investment capacity, financial goals, and resolve to commit to their investment. However, in either case, both investment options give the best results if the investment horizon is long.

One can build a large corpus from a small investment if their investment is long term. Suppose if one invests Rs 3 lakh lump sum and wants to create a Rs 1 crore corpus from it at a 12 per cent annualised return, they may achieve this financial goal in 31 years, where their estimated returns will be Rs 97,66,534.

Achieving a large financial goal is also possible through the SIP investment, where one can make a periodic investment to create a large corpus. If one starts a Rs 2,500 monthly SIP investment and gets a 12 per cent annualised return on their investment, they can create a Rs 1 crore corpus in 33 years, where their investment will be Rs 9,90,000 and capital gains will be Rs 99,39,062.

We will show the faster way to achieve a Rs 4.6 crore corpus from a Rs 15 lakh lump sum investment and Rs 15,000 monthly SIP investment. We will take the annualised return of 12 per cent.  

At a 12 per cent annualised return, it would take an estimated 30 years to achieve the goal of a Rs 4.6 crore corpus. Let's breakdown how one may achieve it. In 10 years, the total investment will be Rs 18,00,000, estimated capital gains will be Rs 15,60,538 and the estimated corpus value will be Rs 33,60,538.

In 20 years, the total investment will be Rs 36,00,000, estimated capital gains will be Rs 1,01,97,860 and the estimated corpus value will be Rs 1,37,97,860. In 30 years, the total investment will be Rs 54,00,000, estimated capital gains will be Rs 4,08,14,598 and the estimated corpus value will be Rs 4,62,14,598.

At a 12 per cent annualised return, it would take a little over 30 years to achieve the target of a Rs 4.6 crore corpus. Let's see how one may achieve it in different phases. In 10 years, estimated capital gains will be Rs 31,58,772 and the estimated corpus value will be Rs 46,58,772.

In 20 years, estimated capital gains will be Rs 1,29,69,440 and the estimated corpus value will be Rs 1,44,69,440. In 31 years, estimated capital gains will be Rs 4,88,32,669 and the estimated corpus value will be Rs 5,03,32,669.

In a SIP investment, the goal can be achieved a year earlier. However, in the lump sum investment the estimated capital gains (Rs 4,88,32,669) will be significantly higher than capital gains from the SIP investment (Rs 4,08,14,598) in the same duration.