Lumpsum Calculator
Calculate how your one-time investment grows with compound interest. See the magic of compounding turn ₹1 lakh into ₹6.72 lakh over 20 years!
The Power of Compound Interest
6.72x
₹1L → ₹6.72L (20yr @10%)
65%
Lumpsum Beats SIP (10Y)
Rule 72
72÷Rate = Doubling Years
12-15%
Equity MF Returns (10Y)
Enter Investment Details
₹1 Lakh
₹5 Lakh
₹10 Lakh
₹25 Lakh
Equity: 12-15% | Balanced: 10-12% | Debt: 6-8%
Your Investment Growth
Future Value
₹15,52,926
3.11x Growth
Initial Investment
₹5,00,000
Total Returns Earned
₹10,52,926
Absolute Return
210.6%
Investment vs Returns
| Year | Opening Balance | Interest Earned | Closing Balance |
|---|
What is Lumpsum Investment?
Lumpsum investment means investing a large amount of money at once into an asset like mutual funds, stocks, or fixed deposits. Unlike SIP (Systematic Investment Plan) where you invest small amounts regularly, lumpsum puts all your money to work immediately.
Lumpsum Formula (Compound Interest)
A = P × (1 + r)n
A = Future Value | P = Principal (Initial Investment) | r = Annual Rate | n = Years
The Rule of 72
To quickly estimate how long it takes to double your money, divide 72 by the interest rate. At 12% return, your money doubles in 72÷12 = 6 years. At 8%, it takes 9 years!
Lumpsum vs SIP: Which is Better?
| Factor | Lumpsum | SIP |
|---|---|---|
| Best When | Market is low, you have large corpus | Regular income, disciplined investing |
| Returns (Bull Market) | Higher - Full amount grows | Lower - Gradual deployment |
| Returns (Bear Market) | Lower - Locked at high price | Higher - Rupee cost averaging |
| Timing Risk | High - Entry point matters | Low - Averaging reduces risk |
| Historical Performance | Beats SIP 65% of time (10Y+) | Better in volatile markets |
Pro Tip: If markets have fallen 20%+ from their peak, consider lumpsum in equity funds. If markets are at all-time highs, spread your investment over 6-12 months through STP (Systematic Transfer Plan).
Power of Compounding: ₹1 Lakh Growth
| Years | At 8% | At 10% | At 12% | At 15% |
|---|---|---|---|---|
| 5 Years | ₹1.47L | ₹1.61L | ₹1.76L | ₹2.01L |
| 10 Years | ₹2.16L | ₹2.59L | ₹3.11L | ₹4.05L |
| 15 Years | ₹3.17L | ₹4.18L | ₹5.47L | ₹8.14L |
| 20 Years | ₹4.66L | ₹6.73L | ₹9.65L | ₹16.37L |
| 25 Years | ₹6.85L | ₹10.83L | ₹17.00L | ₹32.92L |
Real Example: HDFC Top 100 Fund
₹1 lakh invested in HDFC Top 100 in 2004 would be worth ₹11.5 lakh today (Nov 2024) - a 15.2% CAGR over 20 years! Patience and staying invested is the key.
When to Invest Lumpsum?
- Got a Bonus or Windfall: Year-end bonus, inheritance, property sale proceeds
- Market Correction: When Nifty has fallen 15-20%+ from peak
- Debt Funds: Always lumpsum for liquid, overnight, or short-duration debt funds
- Long Time Horizon: If investing for 7+ years, timing matters less
- Rebalancing: When switching from debt to equity within portfolio
When to Avoid Lumpsum?
- Market All-Time Highs: Consider STP instead to average out entry
- Short-Term Goals: Don't lumpsum in equity for <3 year goals
- Emergency Fund: Never invest emergency money in equity lumpsum
- Uncertain Income: If you might need the money, keep it in liquid funds
Frequently Asked Questions
Is lumpsum investment risky?
Lumpsum in equity has timing risk - if you invest at a market peak, short-term returns may be poor. However, over 7+ years, timing matters less. To reduce risk, invest lumpsum in index funds, diversify across large/mid/small caps, and use STP if nervous about timing.
What is the minimum amount for lumpsum?
Most mutual funds allow lumpsum investments starting from ₹500-₹5,000. However, there's no upper limit. Direct stocks require at least 1 share (price varies). For meaningful wealth creation, consider ₹50,000+ as a reasonable lumpsum starting point.
Tax on lumpsum mutual fund investment?
For Equity funds: LTCG (after 1 year) taxed at 12.5% above ₹1.25 lakh gain. STCG (within 1 year) taxed at 20%. For Debt funds: All gains taxed as per your income tax slab, regardless of holding period (as per new rules from April 2023).
Can I convert lumpsum to SIP later?
Yes! Use STP (Systematic Transfer Plan). Invest lumpsum in a liquid/debt fund, then set up auto-transfer to equity fund over 6-12 months. This gives you safety of lumpsum in debt + averaging benefit of SIP in equity. Most AMCs offer free STP facility.