Use this free dollar-cost averaging (DCA) calculator to compare investing a fixed amount every period against investing the same total as a lump sum, under a modeled return.
How the DCA calculator works
Enter your investment per period, an expected annual return, and a time horizon. The tool projects a dollar-cost-averaging path and a lump-sum path over the same period so you can compare the outcomes.
DCA vs. lump sum, honestly
With a steady positive return, investing the full amount sooner usually ends higher because the money compounds longer. Dollar-cost averaging’s real advantage is reducing the risk of bad timing in volatile markets — which a constant-return model cannot show.
Frequently asked questions
Why does lump sum usually win here?
Money invested earlier compounds longer, and the model has no downturns to reveal DCA’s risk-reduction benefit.
Then why dollar-cost average?
It limits the damage of bad timing and matches how most people actually earn and save.
Is a 7% return realistic?
It is a common long-run stock-market assumption, but future returns are unknown and can be lower or negative.
Educational tool, not financial advice. Past and modeled results do not guarantee future performance.
Where to invest: brokers with fractional shares
To act on what this tool shows you, you’ll need a brokerage account. These are established brokers we use that support fractional shares — buying a slice of a share by dollar amount, which makes dollar-cost averaging and diversifying with small amounts easy:
- Charles Schwab — full-service broker whose “Stock Slices” let you buy fractional shares of S&P 500 companies from $5.
- Fidelity — “Stocks by the Slice” fractional investing from $1, with strong research and low-cost index funds.
Referral disclosure: the broker links above are referral links. If you open and fund an account through them we may receive a referral reward at no cost to you; it never affects our tools or conclusions. This is educational information, not investment advice — choose the broker that best fits your needs.