Two Engines in One Portfolio
A lump sum and a SIP compound on different clocks. The lump sum starts working on day one and earns the market's return for every month of the horizon. Each SIP instalment, by contrast, only compounds for the months remaining after it is invested. On the default inputs — ₹5,00,000 upfront plus ₹10,000 a month at 12% for 15 years with a 10% annual step-up — the lump sum finishes at ₹29,97,901, a clean 6.00x multiple of the money deployed.
The SIP side tells a different story. Stepped contributions total ₹38,12,698 by year fifteen (the final year's instalments run ₹37,975 a month), and they grow to ₹86,83,849 — 2.28x on the rupees that went in. The combined corpus is ₹1,16,81,750, with roughly 74% of it built by the monthly stream and 26% by the initial lump. Neither engine wins on its own; they cover each other's weaknesses.
That split matters for planning. A pure lumpsum calculator answers what happens to one deposit; this tool answers the question most investors actually face — a running SIP plus a windfall, growing side by side. If you are weighing whether to spread the windfall instead of deploying it at once, the STP math further down shows the exact price of caution.
The Formula Behind the Number
The lump-sum leg is textbook compounding: FV = L × (1 + i)^n, where i is the monthly rate (annual return ÷ 12) and n is the total number of months. ₹5,00,000 at 12% annual — i = 1% per month — over 180 months becomes 500,000 × 1.01^180 = ₹29,97,901. This is the same engine that powers any future value calculator; the lump leg is just a single-sum case.
The SIP leg compounds each instalment from the month it is invested: FV = Σ amt_m × (1 + i)^(n − m + 1), with contributions assumed at month-end. The step-up multiplies the amount by (1 + s) every twelve months, so year one runs ₹10,000 a month, year two ₹11,000, and year fifteen ₹37,975. The 180 stepped instalments sum to ₹38,12,698 before any growth.
The monthly-rate convention (12% ÷ 12 = 1%) is what mutual fund fact sheets and Indian SIP tools use; note it slightly overstates the effective annual rate, since 12% nominal compounded monthly is 12.68% effective. For the mechanics on a single deposit, the compound interest calculator walks through the same effect instalment by instalment.
Lump Only, SIP Only, or Both
Splitting the default run isolates each engine. The ₹5,00,000 alone finishes at ₹29,97,901; the stepped SIP alone finishes at ₹86,83,849 from ₹38,12,698 contributed. Neither figure is comparable head-to-head — they consume different amounts of capital. A fair comparison needs equal rupees on both sides, which is exactly what an investment calculator built for lump sum versus dollar cost averaging does with a single pool of money.
Watch the month-50 crossover on the defaults: it takes 50 instalments of ₹10,000 — about 4.2 years — before cumulative SIP money exceeds the lump sum. Before that point the lump sum dominates the portfolio; after it, the stream takes over and by year fifteen supplies roughly three-quarters of the corpus. The lump's share at maturity lands at 25.7%.
SIP discipline exists for a reason. Instalments bought during a drawdown pick up more units, pulling the average cost per unit down. The lump sum buys everything at one price — better when markets rise early (the historical majority), painful when they fall right after entry. Combining both keeps day-one exposure while the monthly stream keeps averaging into whatever the market does next.
The Step-Up Multiplier
A flat ₹10,000 SIP for fifteen years at 12% ends at ₹50,45,760 from ₹18,00,000 contributed. Add a 10% annual step-up and the same run finishes at ₹86,83,849 — a ₹36,38,089 premium earned on ₹20,12,698 of additional invested capital. The step-up is the cheapest lever in the tool because every raise rides years of compounding before the finish line.
The sweep makes the leverage visible: step-ups of 0, 5, 10, 15 and 20% produce combined corpora of ₹80,43,661, ₹95,28,653, ₹1,16,81,750, ₹1,48,33,126 and ₹1,94,72,305 on identical return and horizon. The 20% run requires ₹68,44,213 of extra contributions versus flat — the premium is powerful, but the household budget has to absorb it.
Matching the step-up to salary growth is the practical rule. Indian salary increments typically run 8–10%, and a 10% step-up keeps the SIP's share of income roughly constant while compounding does the heavy lifting. Once the corpus is running, judge any single fund inside it with the CAGR calculator — a point-to-point growth rate hides the step-up's contribution, so run both tools when reviewing performance.
Deploying a Windfall: All at Once or via STP
The classic fear: markets are near a high, and dropping ₹5,00,000 in one shot feels reckless. The alternative is a systematic transfer plan — park the lump in a liquid fund earning, say, 7%, and move one-twelfth into equity every month for a year while the SIP continues. On the defaults, going all-in now finishes at ₹1,16,81,750 versus ₹1,16,29,670 for the 12-month STP.
The gap is ₹52,080 — about 0.45% of the final corpus. That is the expected cost of spreading entry over twelve months at a five-point equity-liquid rate differential. The insurance is real: if equity drops 20% in the first quarter, the STP keeps buying the drawdown at lower prices while only a quarter of the lump had been deployed.
The longer the window, the higher the expected drag — a 24-month spread at the same rate differential widens the gap to ₹1,28,753, roughly 2.5 times the 12-month cost. For horizons beyond ten years, going all-in has historically won; for shorter horizons or nervous sleep, the liquid-fund buffer is cheap. To price the idle parking leg, a fixed deposit calculator shows what the debt side of that compromise earns.
What the Corpus Actually Buys
₹1,16,81,750 in 2041 is not ₹1.17 crore of today's shopping. At the default 6% inflation, the real value of the corpus is ₹48,74,386 — under half the headline figure. The tool prints both numbers so goals can be set in today's rupees instead of nominal ones that flatter the plan.
The sensitivity is steep. At 4% inflation the real corpus is ₹64,86,461; at 5% it is ₹56,19,122; at 8% it falls to ₹36,82,575. A two-point assumption error swings purchasing power by ₹16–28 lakh on this run, which is why the inflation input warrants the same attention as the return assumption. For reverse questions — what a rupee amount from a past year is worth now — the inflation calculator handles year-by-year price adjustment.
The practical fix is to aim at the real number, or to raise the SIP step-up above inflation so contributions grow in real terms. A 10% step-up against 6% inflation adds about 3.8% real growth to the instalment stream every year — the quiet reason step-up SIPs beat flat ones over long horizons without any extra forecasting skill.
Taxes, Exit Loads, and What You Keep
Equity fund gains above ₹1.25 lakh a year are taxed at 12.5% under current LTCG rules (verify limits before filing — Finance Acts move them). On the default run the gain is ₹73,69,053, the exemption covers the first ₹1,25,000, and the tax bill comes to ₹9,05,507 — leaving ₹1,07,76,244 post-tax. The 80C side of the ledger works separately: contributions to eligible funds reduce taxable income in the year they are made.
Two practical notes on exits. Instalments redeemed within a year attract the fund's exit load, commonly around 1%, and each SIP instalment has its own holding-period clock — redemptions are applied FIFO from the oldest instalments first. Debt fund gains are taxed at slab rate, which changes the lump-versus-SIP math if part of the corpus sits in hybrid or debt funds.
Tax-saving ELSS funds slot into the same structure. They are equity funds with a three-year lock-in and Section 80C eligibility, and SIPs into them work identically to any other equity SIP. Size the 80C piece with the ELSS calculator before assigning the whole lump sum to it — the lock-in applies to every instalment individually.
Fitting the Hybrid Into a Full Plan
A worked example: a 35-year-old parks a ₹2,00,000 bonus and runs a ₹15,000 SIP with a 10% step-up for twenty years at 12%. The tool projects ₹3,20,11,584 from ₹1,05,09,500 invested — ₹99,81,363 in today's rupees at 6% inflation. That second number, not the headline crore count, is what retirement math should start from.
Most salaried investors already run the debt half of their plan without thinking about it: the EPF corpus compounds tax-free through every working year. Project that leg with the EPF calculator and treat the equity SIP as the growth sleeve on top rather than the entire plan. The two legs rarely fall together, which is the point of pairing them.
Targets close the loop. Decide the corpus first — retirement, education, a down payment — then work backwards to the SIP size and lump split the goal needs. The savings goal calculator solves for the monthly amount once the target, horizon and expected return are fixed, and its output can be dropped straight into this tool's SIP field.