Many first-time investors often ask a familiar question—should they invest bit by bit every month or put in a large amount at once?
On the surface, the answer looks straightforward. A lump sum stays invested for longer, so it should grow more. But real life rarely fits into neat financial formulas. And that is why the option that seems “weaker” often turns out to be the one that works better in the long run.
Ritesh Sabharwal, certified financial planner and personal finance expert, often reminds beginners to look beyond the simple maths. “But the choice depends on something more important than just returns,”he says.
His view highlights an uncomfortable truth—money habits matter more than calculators.
The raw numbers certainly paint a clear picture. According to Sabharwal, someone investing Rs 5,000 every month commits the same Rs 60,000 a year as a person who puts the full amount in at the start of the year.
The SIP grows to about Rs 11.61 lakh, while the yearly lump sum reaches roughly Rs 12.30 lakh—a difference of around Rs 69,000. On paper, the lump sum looks like the obvious winner.
But as Sabharwal points out, this entire calculation rests on one assumption: that you actually have Rs 60,000 ready on day one of the year. “For most salaried people, that simply isn’t the case,” he says.
People who save Rs 5,000 every month to build a lump sum often let that money sit in a savings account earning minimal interest. By the time they invest, months have passed, and valuable returns have already slipped away. And even then, the money may not survive untouched. A medical bill, a festive purchase or a short trip can quietly eat into it, explains Sabharwal.
This is where the strength of the SIP shines. It removes the need for repeated decisions and prevents hesitation. Sabharwal says, “The money moves automatically, before you have the chance to rethink or spend it elsewhere. Many investors don’t realise how powerful that discipline can be.”
In wealth creation, inconsistency—not low returns—is usually the biggest hurdle. , he adds.
SIPs also smoothens the bumps in the market. When prices fall, that same Rs 5,000 buys more units; when they rise, it buys fewer. Over time, this cost averaging protects you from investing at an unfortunate moment.
Sabharwal often cites early 2020 as a classic example. Someone who invested Rs 60,000 in January watched the value drop to around Rs 36,000 when the pandemic struck. But the SIP investor buying through February and March picked up units at much lower prices, making recovery much smoother.
That doesn’t mean lump sum investing has no place. “It works exceptionally well when you truly have surplus money you won’t need for several years,” Sabharwal says.
People often receive large amounts through bonuses, inheritances or property sales. In such cases, waiting for a “perfect dip” can be more harmful than volatility. He recalls a client who sold his flat and received Rs 10 lakh. Hoping for a correction, he postponed investing. The market climbed 15% during those months, costing him Rs 1.5 lakh in missed growth. “If you have the money today and a 10-year horizon, invest immediately. Don’t try to time the market,” he advises.
Ranjit Jha, MD and CEO of Rurash Financials, offers a perspective grounded in market behaviour. “When comparing a Rs 5,000 monthly SIP with a Rs 60,000 lump sum, the key differentiator is timing,” he says.
According to him, , but it can just as quickly disappoint if the timing goes wrong. SIPs, on the other hand, move steadily through the market’s ups and downs, reducing the risk of entering at a high.
“Markets hardly ever move in a straight, predictable line. That unpredictability is exactly why SIPs often create a more balanced outcome,” he explains.
Interestingly, the gap narrows sharply when the timeline stretches to twenty years. A Rs 5,000 SIP grows to Rs 49.95 lakh, while the yearly lump sum ends up around Rs 53 lakh. The difference is only about Rs three lakh, says Sabharwal. And in everyday life, that small mathematical advantage is often erased by human hesitation—the habit of delaying, overthinking or waiting endlessly for a supposed “better time”, he adds.
A portion of a bonus can be invested immediately, while the rest can be used to boost the SIP for the coming year. This hybrid path allows investors to stay disciplined while making smart use of occasional windfalls, advises Sabharwal.
Ultimately, It reflects how you handle money, how steady your income is and how confidently you can commit. For most salaried individuals, a SIP fits naturally into their monthly routine and protects them from impulsive decisions. A lump sum is ideal only when surplus funds are genuinely available and can be invested without hesitation.
Sabharwal’s conclusion captures the heart of the matter: “Start with what you have, when you have it. Monthly SIP for regular salary, lump sum for windfalls. But whatever you choose, start today and stay invested. Consistency beats optimisation every single time.”
And Jha echoes the same sentiment. For the average investor who does not track the market daily, a SIP remains the more comfortable and reliable path.
In the end, the real question isn’t which method earns the highest return on paper—it’s which one will keep you invested for years with discipline. And for most people, that quiet, automatic Rs 5,000 SIP tends to win that test.
(This is the first article in our ‘Rs 5,000 investment plan’ series. In the weeks ahead, we will explore more smart ways to make the most of Rs 5,000.)