Lumpsum calculator
Best lumpsum investment calculator online
Precise estimates for one-time payments
Total Value
₹77,646
Total Investment
₹
Expected return rate (p.a.)
%
Time period
yr(s)
Your returns
0.0%
Total Investment
Estimated Return
*This amount is calculated on 12% p.a. for the span of 10 yrs.
Total Investment
₹25,000
Estimated Return
₹52,646
Total Value
₹77,646
Your returns compared with Univest
Univest PRO
₹344646
Others
₹77646
What is lumpsum investment?
Unlike Systematic Investment Plans that involve regular yet smaller investments to be made, Lump Sum Investments are one-time investments involving a substantial amount of money to be invested. Lumpsum mutual fund investments are generally preferred by experienced investors with a high level of risk appetite as they aim for capital creation by company stock appreciation. Moreover, lump sum investments are suitable only for investors who have a huge amount of funds available to be invested in one go.
Comparing SIPs and lump-Sum investments
Systematic Investment Plans:
Pros:
- Investment in SIPs helps in inculcating regular and disciplined investing habits among investors.
- The investment amount can be as minimal as Rs. 500, which makes SIPs a great investment approach for everyone, thus reaching a wider population.
- Since the SIPs are based on the concept of Rupee Cost Averaging, market fluctuations can be navigated easily, thus mitigating the risk associated with adverse market conditions.
- SIP mutual funds are managed by experienced finance professionals who are well-versed in dealing with various market conditions. This provides more intellectual decisions, thus eliminating the need for individual investors to devote time and effort.
Cons:
- The returns are entirely based on the overall performance of the mutual fund and the investment decisions taken by the mutual fund manager. There is less scope for decisions based on the personal intuitions of the investors with respect to the market trends.
- SIP investors have less control over the NAV at which units are purchased as the date of SIP investment is predetermined.
- Some mutual fund houses might charge transaction costs on every SIP amount paid.
- The entire mutual fund might take a downturn even if some of the stocks are underperforming. This can reduce the potential returns that could be earned otherwise.
Lump sum Investments :
Pros:
- In the case of lump sum investments, investors have complete control of the timing of investment in accordance with the market situation. They can decide when to make the investment. In simpler terms, lump sum investment allows investors to invest when the market is favourable.
- Some investors might not be comfortable with regular investment requirements. Thus, lump sum investments allow such investors to make huge investments in one go.
- Investors can enjoy comparatively higher autonomy while managing their investments due to negligible dependency on professional mutual fund managers.
- Sometimes, lump sum investments can also provide quicker and higher returns when markets are following a bullish trend.
Cons:
- While investing a lump sum amount might have potentially higher returns, it is a one-time investment. Due to this, individuals can not develop a regular saving habit.
- It requires a comparatively huge amount, which is not a feasible option for lower-income individuals.
- Since it is a one-time investment, market timing is a significant factor in determining the returns earned on a lump sum investment.
- A thorough analysis of the market trends must be done in order to ensure high returns. Lack of professional experience among investors might lead to huge losses due to improper decision-making in lump sum investments.
For better clarity, let us take an example:
Investor A invests a lump sum amount of Rs. x and Investor B begins an SIP of Rs. y on 29th December, 2023. The market follows a bullish trend for the next month. On 29th January 2024, Investor A must have earned a significant amount of return. However, investor B might not have had huge returns as he invested a smaller amount in a SIP. In such cases, lump sum investments are beneficial.
On the other hand, if the market had followed a bearish trend, Investor A would have incurred huge losses whereas Investor B’s loss would be significantly lesser, in such cases, SIPs are beneficial as they prevent huge losses in short-term horizons.
What is lump sum calculator?
A lump sum calculator is an online financial tool that assists in the computation of the estimated value of lumpsum mutual fund investments. Using a lump sum calculator, you can quickly calculate the returns on your investment. Additionally, you can also calculate the expected value of your investment at the end of the tenure of investment. This can help in better planning of your financial goals.
Benefits of using a lump sum calculator
- Estimation of the Future Value: As the name suggests, the primary advantage of using a lump sum calculator is that it allows the investors to estimate the potential returns and the expected future value of their lump sum investment. Having clarity with respect to future returns will help them make informed investment decisions so they can align their financial goals accordingly.
- Convenient: Since there are no technical terms to be input while using an online lump sum mutual fund calculator, it is easier and more convenient for investors to estimate the returns on their lump sum investments.
- Reliable: Online lump sum SIP calculators are a reliable source to compute the future prospects of a lump sum investment made.
- Comparison of different strategies: Lump Sum calculators provide an advantage of analysing different scenarios considering various strategies like altering the lump sum investment amount or the total tenure of investment. This analysis of multiple scenarios helps investors to make financial plans as per the availability of funds and the time horizon.
How to use lump sum calculator?
Using an Online Lump Sum Calculator is simple. Here’s a guide for you to make use of it:
- Open a Lump Sum Calculator online, either on your mobile or laptop.
- Input the principal amount, that is, the lump sum investment you want to make.
- Enter an accurate annual rate of interest in percentage terms.
- Set the total number of years you want to invest.
- Once all the required details have been entered, click ‘Calculate/Proceed’.
By following these steps, you can easily calculate the returns using an Online Lump Sum Calculator.
Conclusion
In conclusion, lump sum investments prove to be a profitable investment avenue for investors with a substantial amount of funds available for a single-time investment. While these investments have a potential for higher returns as compared to Systematic Investment Plans, it is imperative to navigate the risks associated with fluctuations in the market. Especially with the introduction of lump sum calculators available online, it has become convenient for investors to analyse multiple scenarios and investment strategies. This further facilitates better decisions with respect to financial planning.
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FAQs
What is the difference between Lump Sum and SIP?
Lump sum investment is made only once with a substantial amount whereas Systematic Investment Plans involve smaller amounts to be invested periodically. Moreover, lump sum investments are riskier as market conditions play a vital role in determining the returns on investment.
How accurate is the Lump Sum SIP Calculator?
Lump Sum SIP calculators significantly help to calculate the estimated amount of returns from an investment. However, the actual returns may vary due to potential changes in the market conditions.
What is a lump sum mutual fund calculator?
A lump sum mutual fund calculator is a powerful tool that helps in the estimation of potential returns of a one-time investment.
Which is more advantageous - SIP or lump sum investment?
Lump Sum investments save you from the hassles of keeping track of the investment every month. However, the level of risk involved may be higher. On the other hand, SIPs might require you to keep track of investments every month but the risk involved is comparatively lower. Deciding among the two alternatives is subjective as per the risk appetite and the availability of funds with the investors.
What is the formula to calculate returns on lump sum investment?
The formula to calculate returns on lump sum investment is as follows:
A = P(1+r/n)^nt
Where,
A is the amount of expected return made by the lump sum investment
P is the present value of the invested amount
r is the annual rate of return
t is the total tenure of the investment
n is the frequency of compounding interest
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