How a Lumpsum Calculator Can Be Helpful in Making One-Time Investment

Lumpsum and SIP are the two modes of making investment in mutual funds India and moving towards your planned financial goals in an efficient manner. In today’s day and age, financial planning and investment becomes imperative, in order to sail through unforeseen circumstances or financial crunches.

Every investor must curate a plan on how to invest their savings, based on their frequency of income. Suppose, a student with a monthly allowance wants to invest in mutual funds, then it would be recommended for him/her to start with a SIP or Systematic Investment Plan. This would help make disciplined investments over a tenure, in order to reach goals.

On the other hand, if an investor has a large amount of money available to invest, then lumpsum method is the way to choose. It helps the investor make one-time investments in a chosen fund for a period he/she wishes to remain invested.

Mutual funds India offers variety, flexibility, options and customisations to its investors, so that they can make the best out of the investments during the investment process. Analysing the concept of lumpsum investing further, we cannot miss out on the humble but extremely important, lumpsum calculator. This tool makes an estimate on how much your lumpsum investment corpus could be after a certain investment tenure. Here is how the lumpsum calculator can help you in making one-time investments:

1.      It eliminates the hassle of manual calculation, thus ruling out the possibility of human errors from the process.

2.      Lumpsum calculator helps investors plan their finances more efficiently once they get an idea on how much they can expect from their one-time investment after the investment tenure.

3.      The tool prompts the users to input simple details, like Investment amount, tenure of investment and the expected return and gives the estimated corpus in seconds.

4.      It provides investors with an almost correct estimate. It is not possible to give the exact numbers here as mutual fund investments are subject to market risks. But, the lumpsum calculator helps investors know the estimated figure which in turn helps investors to plan ahead.

Let us understand this better with a simple example. Suppose, you invest one-time Rs. 2 lakhs in a mutual fund scheme for 20 years. If the rate of return is assumed to be 12% p.a., your expected future corpus would be Rs. 19,29,259. This calculation was done online and instantly using the lumpsum calculator. Once you know your amount to be invested and the tenure, this online tool helps you in making an informed decision. Thus, it not only gives confidence to a new mutual fund investor, it also helps them gain a fair idea on what can be expected out of the investing process.

Another type of lumpsum calculator is the target lumpsum calculator which is a tool that helps an investor know how much he/she should invest in a fund today, in order to reach a desired amount, after the investment period. Let us explain this through a simple example - Suppose, Ankita needs an amount of Rs. 10 lakhs after 15 years, then ideally, she should make a lumpsum investment of Rs. 1,82,697 today, if her assumed rate of return is 12% p.a. We arrived at this number in seconds, using the very helpful tool, the lumpsum calculator.

Likewise, you can play with the lumpsum calculator and can check the expected maturity amount of your one-time investment at various rate of returns and time periods.  

Schemes offered by mutual funds India are becoming increasingly popular among investors due to its benefits of transparency, reliability, customisation etc. One can truly benefit from the investment process, provided they have patience, discipline and want their mutual fund investments to be goal oriented.