# SIP or lump sum: how the two work

Both buy the same fund. They differ in when the money goes in.

Full page: https://discovermf.com/guides/sip-vs-lump-sum
Last checked 23 Oct 2026, from DiscoverMF.

## A SIP

A systematic investment plan buys a fixed amount of the fund on a set date every month (or week, or quarter). When the NAV is low the same amount buys more units; when it is high it buys fewer. Over time your average cost per unit sits below the average NAV, a result called rupee cost averaging.

## A lump sum

A one-time investment puts the whole amount in at once, at one day's NAV. All of it is exposed to the market from that day.

## How they compare

- **When markets rise steadily**, money invested earlier has longer to grow, so a lump sum ends ahead.
- **When markets fall soon after you invest**, a SIP buys more units at the lower prices and recovers faster.
- **When the money arrives monthly**, as a salary does, a SIP matches how you earn.
- **Some people combine them**: a lump sum spread over several months with a systematic transfer from a liquid fund. [STP and SWP](https://discovermf.com/guides/stp-and-swp) explains how.

## Try it on a real fund

Every fund page has a calculator showing what a SIP or a lump sum started 1, 3, 5 or 10 years ago would be worth today, from the fund's own prices. The [SIP calculator](https://discovermf.com/calculators/sip) and [lump sum calculator](https://discovermf.com/calculators/lumpsum) work at a return you choose.

## Questions

### Is a SIP safer than a lump sum?

A SIP spreads the price you pay over time. The fund's risk is the same; what changes is how much of your money is exposed to any one day's price.

### Can I add a lump sum to a fund I hold by SIP?

Yes. Additional purchases go into the same folio.