SIP vs lump sum: Which one is better mode of investment?

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There are two options for investing in mutual funds- firstly, monthly installments of small amounts that is Systematic Investment Plan (SIP) and secondly investing lump sum amount together. Investors are often in a fix on which route to opt for when investing in mutual funds. Which one is better and which will get more returns? CFP Surya Bhatia said that the answer to this never-ending debate on SIP vs lump sum investment will depend on the investor and his/her financial status. If the investor has a lump sum amount to invest then he/she can invest all at once. But if there is not a huge amount, then the path of SIP installation every month will be right for them.

More important than the amount of investment is how soon you start investing. Surya said that people think that the more money they invest, the better the return will be. So let’s wait that after depositing a large amount, we will start investing. This is where tools like SIP prove to be helpful, through which you can invest an amount as small as Rs 100 through micro-SIP.