Lumpsum calculator computes the maturity amount of a present-day investment. In simple words, you can know about the maturity amount prior to your investment. Once an investor enters the details like Lump-sum investment amount, desired numbers years to invest, and the expected returns as a rate of interest, the calculator will show you the maturity amount.
Features & Benefits of Lumpsum Calculator
- Simple and fast process
- Made for everyone
- Predicts future returns
- User-friendly interface
- Compounding interest benefits
Working of A Lumpsum Calculator
A = P (1+ r/n) ^nt
|A||Estimated return on the invested amount|
|P||Present value or the amount you want to invest today|
|r||Rate of return in percentage|
|t||Expected duration of the investment|
|n||Number of compounded interests in each year|
The above method is used to calculate the returns on mutual fund investment. To understand it better, look at this case study:
Suppose, Ramesh wants to invest Rs 3 lakh via lump-sum investment for 2 years at a 12% return, then he will get a return of Rs 38,047 over the investment of Rs 3 lakh. In other words, he will get Rs 3,38,047 as the maturity amount.
Best Time to Choose for A Lumpsum Investment
- When a salaried person gets yearly bonus.
- When one gets money from sale of property/assets.
- When one receives money from a matured investment.
- When a person gets money as a one-time settlement of any dispute.
The Formula to Calculate Mutual Fund Returns
There are two methods which you can apply to calculate mutual fund returns:
- Lumpsum calculator: Lumpsum is a mode of investment which lets you invest a substantial amount for a longer period for maximum returns. Assume you want to invest Rs 3 lakh for the period of 2 years, you can invest whole amount for 2 years with the help of Lump-sum calculator.
- SIP calculator:The Systematic Invest Plan lets you invest a specific amount over a period of time by investing a fixed amount every month. Suppose, you want to invest Rs 3 lakh for 2 years then you can plan your investment by investing Rs 12,500 each month for 24 months by the help of SIP calculator.
Difference Between Lumpsum and SIP
- Higher returns vs lower returns: Lumpsum provides better returns on your investment as the invest gets more exposure to the compounding rate of interest. On the other hand, SIP investment gets lower exposure to the compounding interest rate, hence, it provides lower returns as compared to Lumpsum investment.
- Systematic investment vs one-time investment: Lumpsum investment requires a one-time investment and to get a bigger return, you must invest a handsome amount initially. Contrary, with a SIP investment, you invest a fixed amount every month to get invested. However, you will get great returns on your investment, but that will be lower as compared to Lumpsum investment.
- Long-term investment vs. Short- term investment: Many people want to park their money for 10 to 20 years;hence , they can get good returns on investment if they invest through Lumpsum process. On the other side, if you want to grow your wealth in a short span of time or don’t want to wait for longer, you can invest via SIP investment approach.
10 Best Funds for Lumpsum Investment
|Name of the fund||Type||Age of the fund|
|UTI Nifty Index Fund||Index fund||5 years|
|SBI Banking & Financial Services Fund||Sectoral/Thematic||4 years|
|Aditya Birla Sun Life Tax Relief 96||Equity Linked Saving Scheme (ELSS)||5 years|
|HDFC Small Cap Fund||Small Cap||5 years|
|Tata Equity P/E Fund||Equity Value||5 years|
|Kotak Emerging Equity Scheme||Mid Cap||5 years|
|Reliance Large Cap Fund||Large Cap||5 years|
|Axis Focused 25 Fund||Equity Focused||5 years|
|Mirae Asset Emerging Bluechip Fund||Large & Mid Cap||5 years|
|ICICI Prudential Bluechip Fund Direct||Large Cap||5 years|
Advantages of Using Afinoz Lumpsum Calculator
Free tool: Any investor can use this tool for free. This too is available on the official website of AFINOZ.
User-friendly interface: Person with no financial background can use this tool to make the wise investment decision.
Easily switchable between Lumpsum to SIP calculator: With a single click, the interface can be changed from Lumpsum to SIP. So, it’s a boon for investors.
Fast & Secure: You can use this tool without entering your personal information, hence, it provides you faster results in a secured way.
Frequently Asked Questions (FAQ)
Q) If anyone can use Lumpsum calculator
Ans) Yes, anyone can use Lumpsum calculator but it is beneficial for the investors. If you want to invest some money in mutual funds, you can know about the maturity amount prior to investing.
Q) Does this tool help investors find best mutual funds?
Ans) As you input all the required information, the calculator shows you the amount you will get after the maturity. Apart from that, you can also find funds that will be best to get the desired returns on your investment.
Q) Do I need to sign-up before using this tool?
Ans) At Afinoz you can try this tool for free and there is no need to sign-up to use this tool.
Q) Does the tool show the actual return?
Ans) Lumpsum calculator shows the accurate result but at the time of maturity there may be an up-down as mutual funds involves a market risk.
Q) Is Lumpsum investment a good option?
Ans) Definitely, Lumpsum investment is a good option but only if you want to invest your money for a longer time.