Written by the Bini team · Last updated: October 2026
With a SIP, you invest a fixed amount every month on a specific date. With a lump sum, you invest a larger amount all at once. Neither is always better. Which one comes out ahead depends on how the market moves after you invest.
SIP vs lump sum at a glance
| SIP | Lump sum | |
|---|---|---|
| How you invest | Fixed amount every month on a specific date | One larger amount at one time |
| Best suited to | People with regular income | People with savings ready to invest |
| Purchase price | Spread across different NAVs | A single NAV |
| Market exposure | Builds up gradually | Full exposure from day one |
| Starting amount | Can be small, from ৳ 1,000 on some funds | Needs a larger amount up front |
| Discipline | Can run on a schedule | Needs a deliberate decision |
A worked example
Suppose you have ৳ 120,000. You could invest it all today or invest ৳ 30,000 in each of four installments. To keep the maths clear, we'll use four installments and see what happens in two different markets.
Scenario 1: The market rises
NAV is ৳ 10, then ৳ 10.50, ৳ 11 and ৳ 11.50 at the four installments and ends at ৳ 12.
| Units bought | Final value at NAV ৳ 12 | |
|---|---|---|
| Lump sum (৳ 120,000 at ৳ 10) | 12,000 | ৳ 144,000 |
| SIP (4 × ৳ 30,000) | about 11,193 | about ৳ 134,300 |
The lump sum wins because all the money was working from the start.
Scenario 2: The market falls
NAV is ৳ 10, then ৳ 9.50, ৳ 9 and ৳ 8.50 at the four installments and ends at ৳ 8.
| Units bought | Final value at NAV ৳ 8 | |
|---|---|---|
| Lump sum (৳ 120,000 at ৳ 10) | 12,000 | ৳ 96,000 |
| SIP (4 × ৳ 30,000) | about 13,021 | about ৳ 104,200 |
Now the SIP is ahead, because the later installments bought more units at lower prices. Both investors still lost money. The SIP just lost less.
So does SIP always do better?
No. Nobody knows in advance whether the market will rise or fall, which is exactly why there's no universal winner. These numbers are illustrations, not forecasts.
When SIP tends to make sense
- You earn a regular income
- You want a steady investing habit
- You don't have a large amount available at once
- You'd rather spread out your purchase prices
When a lump sum may make sense
- You already have money set aside for investing
- Your goal is long term
- You've chosen an asset mix that suits you
- You understand and accept the market risk
Can you do both?
Yes. Plenty of investors put a lump sum in when they have spare cash, such as a bonus and keep a monthly SIP running alongside it.
The bigger question isn't SIP or lump sum. It's your cash flow, your goal, your time horizon and how much risk you can live with.
Frequently asked questions
Is SIP safer than lump sum?
A SIP spreads your purchase timing, which can soften the effect of buying at a high price. It doesn't remove market risk.
Which is better for beginners?
Many beginners prefer a SIP because the amounts are smaller and the habit is built in. The best choice still depends on your finances.
Can I switch from SIP to lump sum?
You can make a lump-sum purchase in a fund separately from your SIP.
How much should I put into a SIP?
See our guide on how much to invest through SIP.