Rs 3,000 SIP Vs Rs 3,00,000 Lump Sum: Which can generate a higher corpus in 30 years?
When it comes to investing, many investors face the confusion of whether to opt for an SIP or a lump sum investment. Which one has the potential to offer higher returns? In this article, we will explore comprehensively to compare SIPs and lump sum investments with the help of calculations, and determine which can offer a higher corpus.
One of the most common dilemmas faced by beginner equity investors is whether to invest through a Systematic Investment Plan (SIP) or a lump sum. Which of these methods of investment can generate higher returns? Here, will explore both routes of investment. We will see the difference between their returns and figure out which can offer a better return, a Rs 3,000 SIP investment or a Rs 3 lakh lump sum investment for 30 years.
Photo source: Pixabay/Representational
What is systematic investment plan?
SIP is a method of investing in which investors invest a fixed amount of money in a mutual fund or stock at regular intervals, such as daily, weekly, monthly, fortnightly, quarterly, or annually.
What is lump sum investment?
In a lump sum (one-time) investment, a large amount of money is invested all at once. The returns from a lump sum investment depend largely on the amount and how markets are performing.
SIP calculations
Target corpus: ?
Monthly investments: Rs 3,000
Annualised return: 12 per cent
How much can Rs 3,000 SIP build in 10 years?
In 10 years, the invested amount will be Rs 3,60,000, the capital gains will be Rs 3,12,108, and the estimated retirement corpus will be Rs 6,72,108.
How much can Rs 3,000 SIP build in 20 years?
In 20 years, the invested amount will be Rs 7,20,000, the capital gains will be Rs 20,39,572, and the estimated retirement corpus will be Rs 27,59,572.
How much can Rs 3,000 SIP build in 30 years?
In 30 years, the invested amount will be Rs 10,80,000, the capital gains will be Rs 81,62,920, and the estimated retirement corpus will be Rs 92,42,920.
Lump sum investment calculation conditions
Target corpus: ?
Lump sum investment: Rs 3 lakh
Annualised return: 12 per cent
What can be your corpus in 10 years with Rs 3 lakh lump sum investment?
The investment amount will be 3,00,000, the estimated capital gains in 10 years will be 6,31,754, and the estimated corpus in 10 years will be Rs 9,31,754.
What can be your corpus in 20 years with Rs 3 lakh lump sum investment?
The investment amount will be 3,00,000, the estimated capital gains in 20 years will be 25,93,888, and the estimated retirement corpus in 20 years will be Rs 28,93,888.
What will be your corpus in 30 years with Rs 3 lakh lump sum investment?
The investment amount will be 3,00,000, the estimated capital gains in 30 years will be 86,87,977, and the estimated retirement corpus in 30 years will be Rs 89,87,977.