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This is one of the most misunderstood topics in personal finance. The answer depends on market conditions, your risk profile, and practical circumstances.
SIP wins in volatile or declining markets — you buy more units when prices are low, reducing your average cost through rupee-cost averaging. For salaried investors investing from monthly income (not a windfall), SIP is also simply the only practical option. And it removes the emotional burden of timing the market.
In a consistently rising market (bull run), lumpsum wins mathematically — all your money is invested and compounding from day one. If you receive a bonus, inheritance, or proceeds from a property sale, investing it as lumpsum at the start of a market cycle outperforms deploying it as SIP over 12 months.
Regular SIP: Final corpus ≈ ₹99.9 lakh
Step-Up SIP (10% annual increase): Final corpus ≈ ₹1.84 crore
Difference: ₹84 lakh — purely from increasing SIP with salary growth
Starting a ₹5,000/month SIP at age 25 for 35 years (to age 60) at 12% builds roughly ₹3.24 crore. Starting the same SIP at age 35 for 25 years builds only ₹94 lakh — one-third the corpus, despite investing for only 10 fewer years. The first 10 years of compounding are irreplaceable.