# SIP vs Lump Sum: Which Works Better in Indian Markets?

*By Utkarsh Agrawal · 7 min read*

If you have ₹10L sitting in your bank account today, should you invest it all at once, or spread it across 12 months?

## The maths
Historically, in markets that trend upward (like India over 20 years), **lump sum beats SIP roughly 60–66% of the time** — less time out of the market.

## The three real questions
1. **Do you actually have a lump sum?** Monthly salary = SIP is the only mechanism.
2. **How will you behave in a 30% drawdown?** If "panic-sell", SIP/STP wins regardless of maths.
3. **Where is the market today?** At extremes — stage in via STP. At neutral — lump sum works.

## The middle path: STP from a liquid fund
1. Park lump sum in liquid fund (~6–7%, fully liquid).
2. Set up a Systematic Transfer Plan (STP) to your equity fund.
3. Spread over 6–12 months based on market level and comfort.

## Lump sum clearly wins
- Markets just corrected 20%+ and sentiment is poor
- Long horizon (10+ years), low check-frequency
- Lump sum is small vs total portfolio

## SIP / STP clearly wins
- First-time equity investor
- Markets near all-time highs, stretched valuations
- You know you'll check weekly and worry

**Bottom line:** The best plan is the one you don't abandon. Optimise for behaviour first, returns second.