Lump Sum Calculator

Estimate the future value of a one-time investment.

Invested Amount
Est. Returns
Total Value

Year-wise Projection

Year Opening Balance Interest Earned Closing Balance

Understanding Lump Sum Investments

What is a Lump Sum Investment?

A lump sum investment is a one-time investment of a significant amount of money into a financial instrument, such as mutual funds, stocks, or fixed deposits. Unlike a SIP, where you invest smaller amounts regularly, a lump sum investment is made all at once. This approach is often used by individuals who have received a large amount of cash, like a bonus, inheritance, or sale of property.

Benefits of Lump Sum Investing

The primary advantage of a lump sum investment is the potential for higher returns through the power of compounding. Since your entire corpus is invested from day one, it has more time to grow and generate returns on itself. However, it also carries a higher market risk, as a downturn right after you invest can significantly impact your capital.

Frequently Asked Questions (FAQ)

A lump sum investment is generally suitable when you have a large amount of idle cash and a long-term investment horizon (e.g., 7-10 years or more). This long timeframe allows your investment to recover from potential market downturns. It's also beneficial if you believe the market is undervalued. If you prefer a disciplined, less risky approach, a SIP is usually the better choice.

This calculator uses the standard compound interest formula: Future Value = Principal * (1 + Rate)^Time. It projects the growth of your initial investment based on the expected annual return rate over the specified period. Please remember that this is an estimation; actual market returns are not guaranteed and can vary.

Withdrawal rules depend on the specific financial product you invest in. For example, some mutual funds (like ELSS) have a lock-in period of 3 years. Fixed deposits also have penalties for premature withdrawal. It's crucial to understand the terms and conditions of your chosen investment before committing your funds.