Aditya Birla Sun Life AMC Limited

SIP vs Lumpsum: Which Investment is Better? - ABSLMF Blog

Lumpsum Vs SIP

Jan 29, 2020
3 mins | Views 11609

You have decided that you want to invest in a certain Mutual Fund scheme. But now you are not sure how to invest. You have two options:

Lumpsum: A large amount is invested at one go

  • Every rupee stays invested for the full tenure of the investment

  • Requires a more experienced investor

  • Doesn’t require a strict saving habit

  • Allows investing according to current market valuations

Who may invest?

  • A bonus received from work

  • An inheritance

  • A gift from family on a special occasion

Systematic Investment Plan: A small amount is invested at regular intervals

  • You can start with an amount as low as Rs.500

  • Allows rupee cost averaging

  • Automated deduction makes you a disciplined investor

  • Can create separate funds for different goals

  • Can be increased with increase in your salary/income

Who may invest?

  • Anyone with a little amount to spare every month due to a lot of expenses

Another Option? Go for Both

You can keep SIP as the core strategy in your portfolio but if you have investible surplus or come into a windfall earning, you can invest it as a lumpsum.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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