Lumpsum Calculator
Got a bonus or surplus cash? Calculate how much it can grow if invested today.
Invested Amount
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Est. Returns
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Total Value
₹0
Projected Growth
Understanding Lumpsum Investments
A Lumpsum investment is a one-time payment of money into an investment instrument. This is different from SIP where you invest small amounts periodically. Lumpsum is often preferred when you receive a windfall like a bonus, inheritance, or maturity proceeds from another investment.
The Power of Early Start
In a lumpsum investment, your entire capital starts earning returns from Day 1. This maximizes the compounding effect compared to SIP where the capital is deployed slowly over time.
Ideal For
Lumpsum investments are ideal for debt funds, fixed deposits, or equity funds when the market is undervalued. It's a great way to park surplus funds for long-term growth.
Key Considerations
- Market Timing: For equity investments, entering at a market peak can be risky.
- Liquidity: Ensure you don't lock away emergency funds.
- Diversification: Don't put all your lumpsum into a single asset; spread it across different classes.
Formula Used
The calculator uses the compound interest formula:
Where A is the future value, P is the principal investment, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.
How to Calculate Lumpsum Returns: Example
Suppose you invest ₹1,00,000 for 5 years at an annual return of 12%.
- P (Principal): ₹1,00,000
- r (Rate): 12% = 0.12
- t (Time): 5 years
- n (Compounding): 1 (Annually)
Calculation:
A = 1,00,000 × (1 + 0.12/1)^(1×5)
A = 1,00,000 × (1.12)^5
A = 1,00,000 × 1.7623
A ≈ ₹1,76,234
Total Gain: ₹76,234