SIP and lump sum investments are the two most common types of mutual fund investments. While SIPs have grown in popularity over time, new investors may not understand the fundamentals of investing on the lump sum.
Brief on Lump Sum
An investment on a lump sum means when investor formulates a single investment in a specific programme.
What is a lump sum calculator?
A calculator which can be used to estimate an investor’s returns on the lumpsum investment. Just you need to enter the required information, and the calculator will automatically calculate a maturity value approximately based on the input given.
What is the benefit of using a mutual fund lumpsum calculator?
You can utilize the calculator to assess the expected returns on the investments made. As a result, a potential investor can determine whether or not a certain investment option will achieve the financial objectives at the time of investment term maturity.
Some of the advantages of employing a lump sum calculator are as follows:
i) It calculates the expected return throughout the whole investment period. To get an approximation, you are required to include data like the amount invested, estimated return rate, and investment tenure which can be 1 year or 3 years.
ii) It aids investors in better planning and managing the money once you get a rough estimation of the investment’s maturity value.
iii) The calculator preserves time and helps to eliminate human errors while performing manual computations.
iv) Even beginner investors will find it simple and straightforward to utilise a lump sum investment return calculator.
v) It should be noted that because mutual fund investments are accessible to market stakes, exact returns cannot be predicted.
What is the work of the lumpsum calculator:
A calculator that has a computer programme and performs the most difficult calculations. Typically, an investor must submit the following information in the required fields:
- The amount of money invested
- The amount of time they are willing to commit for
- The estimated rate of return that the investor expects from the scheme of mutual funds.
The lumpsum calculator will determine the maturity value of mf investment after you enter the above details.
Computing the lump sum returns on MF on the calculator: The rough estimation on investments returns are calculated using a particular formula by Lump Sum calculators.
Compound interest with a number of times interest is compounded in a particular year as one of the variable.
A = P (1 + r/n) ^ nt
Where: A = calculated returns
P = current investment value
r = return rate
t = tenure
n = number of CI in one year
Suppose you have put Rs15,00,000 in a scheme of MF that pays an average annual return of 12% and compounds 6 months for a period of five years.
In this situation, the anticipated future returns:
A = 15,00,000 (1 + 12/2) ^ ⅖
This is a tricky calculation that a majority of inexperienced investors may struggle to understand. This is when a lump sum calculator comes to your aid and performs the computation for you.
The expected returns at the ending period in this scenario will be Rs26,43,513.
Best Mutual Fund For Lumpsum Investment Calculator
There are different types of Lump sum calculators for computing the Mutual Fund investment.
- Franklin Templeton lumpsum calculator
- Step Up lumpsum calculator
- Kotak mutual fund lumpsum calculator
- LIC mutual fund lumpsum calculator
- Groww lumpsum calculator
- Aditya Birla mutual fund lumpsum calculator
- Axis Bluechip fund lumpsum calculator
- HDFC mutual fund lumpsum calculator
- Finology Lump sum Calculator
Select any one from the list to evaluate the expected return on the Mutual Fund Investment.
Conclusion:
Lumpsum calculator will help you to get a rough estimation of the return which you are expecting at the end of the term. Make sure while calculating the return you can evaluate without inflation or inflation adjusted, two options will be available for you to select.