Dollar-cost averaging vs. lump sum calculator
Compare investing one budget immediately with deploying the same committed amount month by month. Both scenarios use the same historical stock or ETF, dates, dividend policy, and total budget so the difference comes from deployment timing.
How this is calculated
Both runs commit the same sum on the same day, which is what makes them comparable. One deploys it all immediately; the other holds it and buys monthly. Cash awaiting deployment earns the 3-month Treasury yield of the day, compounded daily on an actual/365 basis including weekends. That assumption matters: treating idle cash as earning nothing understates monthly buying, and a single fixed rate is wrong across eras — 2021 and 2023 differ by five percentage points. Because both runs have one cash flow on the same date, the annualised figures are directly comparable.
The heaviest horizontal line on the chart marks the total amount committed.
What this calculator shows
- Equal starting budget
- Both strategies commit the same total amount on the same first day.
- Monthly deployment
- The dollar-cost averaging path invests a fixed amount on each scheduled purchase date.
- Idle cash accounted for
- Undeployed cash follows the historical 3-month Treasury yield instead of silently earning zero.