LumpSum Calculator – Quick Mutual Fund Return Calculator

What is a Lump Sum Investment?

Lump Sum Investment is a way investing your money in any financial option be it stock market, mutual fund, gold, etc. where instead of investing in instalments, you invest your all money in one shot.

Going with lumpsum investing is good, if you have a big amount lying at your home or bank account that you further wanted to invest to keep generating interest on that investment.

If you have received a yearly bonus or your gratuity amount at the time of retirement, sold a property, etc. can be some scenarios where you can go for lump sum investment.

Lumpsum Calculator

A Lump sum calculator is tool that is designed to help you in getting a calculations of your future returns on your lump sum investments.

This way it saves your a lot time that you may have otherwise wasted, doing manual calculations and also protects you in case of error if you do a manual calculation.

Making an informed decision is very necessary in your investing journey because it can make or break your future.

To invest lumpsum amount in any mutual fund you can try Indmoney (Not Sponsored)

How Our Lump Sum Calculator Works

To use our lumpsum calculator:

1. Firstly, enter the lump sum amount you wanted to invest initially in your investment in the “Initial Investment Amount Column”
2. After that, enter the expected annual average return in percentage terms, that you are thinking your investments will going to generate.
3. Finally, enter the investment period in terms of years for which you wanted to stay invested in your investment.

Result Display:

• Initial Amount Invested: The starting investment amount.
• Total Returns: The total returns made over your investment over the period.
• Final Amount After x Years: The total amount you will have including the initial invested amount and total returns you have received on that amount.

Example Calculation Using Our Lumpsum Calculator

Let’s assume you have gotten a yearly bonus of ₹100,000 from your job and that you wanted to invest it.

As per the history NIFTY 50 has given an annual average return between 11-13% so I will take 12% as an expected average annual return and invest this amount for next 12 years to see how much my total returns would become.

Surprisingly, If I invest ₹100,000 today, then I will get total ₹310,584.82 after 12 years, from which ₹210,584.82 are my total returns on my initial investment.

Benefits of Using Lumpsum Calculator

1. Financial Planing – The lump sum calculator helps you to plan your future in advance by knowing how much possible return your lumpsum investment can generate if it compounds at a certain CAGR.
2. Investment Planning – It helps you in choosing the right financial option that can generate the returns you wanted, so that you can achieve your goal of building a certain wealth corpus in future.
3. Time Saving – It saves your alot of time that otherwise you may have wasted to calculate your lump sum mutual fund returns manually.
4. Easy To Use – We designed our lumpsum calculator in such a way that if you are a complete beginner also, still you can quickly calculate the returns on your lumpsum investment in no time.

Factors To Consider When Using Lump Sum Calculator

Using a lumpsum calculator has a lot of benefits but you should remember these few thing while doing the calculations:-

1. Unrealistic Returns – Putting a number and getting the results is easy, but while using an online lump sum calculator you should always be careful that you should not enter an unrealistic expected average annual return as that can give you a wrong idea of your actual returns.
2. Fees and Taxation – The final returns you see are based on the expected average annual return without taking the fees charged by mutual fund companies or brokers and taxation by government into account, that can impact the net return value from your investments.
3. Investment Period – In short term the stock market can be volatile, hence to get the best returns you must stay invested for at least 10-20 years so that your investment can compound properly.
4. Inflation – Do remember the final returns are not inflation adjusted, hence the future purchasing power of your money get’s decreased compared to today’s value of the same amount.

Final Words

Investing is always an adventurous task and a lumpsum calculator can help you cross all the hurdles you will initially get while taking the decision.

Do remember no calculator in this world can predict your future with 100% accuracy as markets are independent and volatile, thus, they only provide an idea of the possible returns.

Hence, you should always plan in such a way that even if you hit an unexpected scenario like COVID your investments can survive it and can keep compounding throughout the years.

Disclaimer: The Honest American provides financial education, investing strategies, & stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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