- Mutual Funds
- Lumpsum Calculator
About Lumpsum Calculator
Lumpsum calculator is a tool by m.Stock that helps you calculate the future value of your lumpsum investment. As you know, lumpsum and Systematic Investment Plan (SIP) are two of the most popular ways of investing in mutual funds. While SIP gives you the flexibility of investing small amounts every month, lumpsum investment involves investing the entire corpus in one go. Since lumpsum investing involves timing the market and accessibility to a large sum of money, retail investors tend to shy away from lumpsum investing. But lumpsum investment works like a charm especially in a rising market where you can lap up mutual fund units in large quantities at one go instead of averaging via SIPs and missing out on market opportunities.
How Does a Lumpsum Calculator Work?
A lumpsum return calculator helps you save both time and effort in manually calculating the future value of an investment and assists in faster decision making. A lumpsum calculator uses three basic parameters to calculate the future value of an investment:
Lumpsum investment amount
Number of years
Expected returns
1 Lakh
for 5 Years
₹2,01,136
15% Returns
Here is an example to help you understand how a lumpsum calculator works. Suppose you have made a one-time investment of ₹1 Lakh in a mutual fund scheme for a period of 5 years, expecting a return of 15% p.a. In this case, the future value of your lumpsum investment will be ₹1,00,000*(1+15%)^5, which is equal to ₹2,01,136.
Steps for Using the m.Stock Lumpsum Calculator
As you can see, the m.Stock mutual fund lumpsum calculator can do the complex math and help you visualize your returns in no time. All you need to do is follow these simple steps:
-
1
Visit the m.Stock lumpsum
calculator page. -
2
Enter the amount you wish
to invest. -
3
Enter the expected return
rate of the fund. -
4
Enter your preferred
investment horizon.
That’s it. The calculator will work out your returns and let you know how much money
you can expect to get back at the end of the investment tenure.
Advantages of Using m.Stock Lumpsum Calculator
Some of the key benefits of using m.Stock’s lumpsum calculator are:
- Helps you make an educated investment decision by comparing returns across different mutual funds over varied investment horizons. While actual returns are subject to market conditions and risks, you can get an estimate of the future value.
- You are able to plan your finances more prudently based on the estimated returns you can expect at the end of the chosen investment period.
- Being an online tool, it is available anytime, anywhere from any web-enabled device.
- It is convenient to use and saves you time and effort in estimating the future value.
- It is especially beneficial for people who are beginning their investment journey.
- Open an Account
Frequently Asked Questions on Lumpsum Calculator
When an investor chooses to invest a large amount in one single transaction, it is referred to as a lumpsum investment.
While lumpsum investments are made at one go, SIP (Systematic Investment Plan) allows you to invest in smaller amounts every month.
If you have received a sudden windfall, like an inheritance or bonus, it makes more sense to invest that money in one shot. While doing so, it is important to carefully consider the market conditions and evaluate the details of the mutual fund before choosing to invest in it.
To make a lumpsum investment in mutual funds, you need to open a demat account with m.Stock. This is easily done online, in a matter of a few minutes. After the account is active, you can visit the mutual fund's section on the m.Stock web portal or the m.Stock app to choose the funds to invest in, and click on lumpsum investment as the preferred mode of investment.
Both SIP and lumpsum investments have their own merits and limitations.
- SIP is a more disciplined way of investing that creates a healthy financial routine.
- You can start a SIP with as little as ₹100 every month.
- SIP purchase is made at monthly intervals with varying market conditions. This helps offset market volatility in the long run and provides the benefit of rupee-cost averaging.
There is only one eligibility criteria for making a lumpsum investment or investing in mutual funds in general - your KYC verification should be complete. Even minors can make lumpsum investments in mutual funds courtesy their parents or guardians.
There is no maximum limit to the lumpsum investment that you can make in mutual funds. Though some AMCs cap the maximum daily purchase limit to ₹1 crore.
No, SIP and lumpsum are two different modes of investing in mutual funds. You cannot convert a lumpsum investment into SIP.
SIP and lumpsum investments both have their own pros. While it is recommended to use the lumpsum mode of investment when you have surplus cash or a larger amount at your disposal, SIP is a more methodical way of investing small sums regularly. The power of compounding is applicable to both, and they are equally potent in generating high long-term returns.
All investments are subject to market risk, including lumpsum investments.
Yes, indeed. You can choose to make a lumpsum investment each month. This will require manually making the investment in the fund and the amount of your choice.