Lumpsum Calculator
Calculate returns on your one-time investment.
Projected Maturity Value
Invested Amount
Wealth Gained
Year-by-Year Breakdown
| Year | Opening Balance | Interest Gained | Closing Balance |
|---|---|---|---|
| Enter values to see growth. | |||
What is a Lumpsum Investment?
A Lumpsum Investment is a one-time investment of a substantial amount of money into a financial instrument, such as a mutual fund or a fixed deposit. Unlike a SIP (Systematic Investment Plan) where you invest small amounts regularly, a lumpsum investment puts your entire capital to work from day one.
The Power of Compounding
Lumpsum investing maximizes the "power of compounding" because your entire principal starts earning interest immediately. Over 10-20 years, the interest earned can often exceed the principal amount itself.
The Formula
The calculator uses the standard compound interest formula:
A = P (1 + r)ᵗ
A= Final Maturity AmountP= Principal Investmentr= Annual Rate of Return (decimal)t= Time in Years
Lumpsum vs. SIP: Which is Better?
Lumpsum: Best when markets are low or you have a sudden windfall (bonus, inheritance). Higher risk but potentially higher reward if timed well.
SIP: Best for salaried individuals to build discipline and average out market volatility (Rupee Cost Averaging). Lower risk.
Frequently Asked Questions (FAQs)
Q. Where can I invest a lumpsum amount?
Common options include Mutual Funds (Equity/Debt), Fixed Deposits (FD), PPF, and Stocks. Mutual funds generally offer higher returns over the long term compared to FDs.
Q. What is a good return rate?
For long-term equity mutual funds, 12% is a reasonable expectation. For FDs, 6-7% is standard. Adjust the rate in the calculator to see different scenarios.