Question 1

Lump sum vs SIP — which is better?

Accepted Answer

In a rising market, lump sum gives higher returns (full amount compounds from day 1). In volatile markets, SIP reduces timing risk. For most salaried people, SIP is practical. For windfalls (bonus, inheritance), consider lump sum or STP.

Question 2

When is the best time for lump sum?

Accepted Answer

After a significant market correction (20-30% crash) is the best time for lump sum — you buy at bargain prices. If markets are at all-time high, consider STP instead: park money in liquid fund, auto-transfer to equity over 6-12 months.

Question 3

₹10 lakh lump sum for 10 years — how much?

Accepted Answer

At 12% return: approximately ₹31.1 lakh. At 15%: approximately ₹40.5 lakh. Your ₹10L investment triples in 10 years at 12% CAGR.

Question 4

Is lump sum riskier than SIP?

Accepted Answer

Yes, for equity investments. If you invest lump sum at a market peak and the market drops 30%, your portfolio drops 30% immediately. SIP would average out this drop over months. For debt funds or FDs, timing risk is minimal.

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