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What is a Lumpsum Calculator?

A Lumpsum Calculator is a tool which lets you to determine how much your money will grow if you invest it all at once and keep it alone for a set amount of time. You select the amount you plan to invest, how long you expect to leave it there, and the expected amount of return. The calculator then conducts calculations and displays an estimate of how much your investment might be worth in the future. It’s useful for budgeting and displaying the probable implications of your investing choices.

What is Lumpsum Investment?

Lumpsum investing, frequently known as one-time investing, involves spending much money in a single transaction rather than spreading it out over time. It’s an easy plan in which you put a lump sum of capital into an investment vehicle like mutual funds, equities, bonds, or real estate and then let it increase over time due to the power of compounding returns. Unlike systematic investment plans (SIPs), which require regular, periodic installments, lump-sum investments are paid in one payment.

In mutual funds What are lump sum investments and SIP investment comparisons?

In mutual funds, Lumpsum (One Time Investment) and SIP (Systematic Investment Plan) are two different methods of investing:

Lumpsum Investment:

  • Lumpsum investment involves paying an immense sum of money into a mutual fund scheme all at once.
  • You make a single huge loyalty upfront rather than spread it out over time.
  • It is ideal for investors who have a large sum of money and wish to invest it quickly.
  • Lumpsum investments can be advantageous if made at the proper time, particularly when markets are low, with the potential to maximise gains over time.

SIP (Systematic Investment Plan):

  • SIPs involve investing a set amount of money on a regular basis at already established intervals, often monthly.
  • You agree to invest a lesser amount regularly over time, regardless of market conditions.
  • It’s great for investors who wish to invest on a regular basis and profit from rupee cost averaging, which means buying more units when prices are low and fewer when prices soar.
  • SIPs help keep track of investments and are ideal for investors who want to spread their money over time and limit the impact of market volatility.


  • Flexibility: Lumpsum investments allow you to invest any amount at any time, whereas SIPs require you to commit to investing a set amount on a regular basis.
  • Timing: Lumpsum investments require market timing, whereas SIPs allow you to invest on a regular basis regardless of market conditions.
  • Risk: Lump sum investments require placing a large sum at once, whereas SIPs spread risk over time through regular investments.
  • Potential Returns: If invested at the right time, lump sum investments can yield higher returns, whereas SIPs provide the benefit of rupee cost averaging.
  • Psychological Factors: SIPs may be less emotionally interesting to investors since they eliminate the need to time the market and reduce the impact of emotions on investment decisions.

Which one do I prefer, SIP or lumpsum investments?

If your investment is long-term, then a lump sum investment is better for the same amount. Let us see this by example:

Let’s extend the example to a 10-year investment horizon to see how lump sum and SIP investments compare in terms of returns over a longer period.


  • Lumpsum Investment: ₹100,000 invested upfront for 10 years.
  • SIP Investment: ₹8,333.33 invested every month for 10 years, totaling ₹1,000,000.

For both Lumpsum and SIP investments, let’s assume an annual return of 12%.

Lumpsum Investment:

  • Initial Investment: ₹100,000
  • Annual Return Rate: 12%
  • Compounded monthly
  • After 10 years:
    • Future Value = Initial Investment * (1 + Return Rate)^Number of Years
    • Future Value = ₹100,000 * (1 + 0.12)^10
    • Future Value = ₹310,584.77

SIP Investment:

  • Monthly Investment: ₹8,333.33
  • Total Investment over 10 years: ₹1,000,000
  • Annual Return Rate: 12%
  • Compounded monthly
  • After 10 years, we calculate the future value of each monthly investment and then add them up to get the total value of the investment.

To calculate the future value of the SIP investment over 10 years, we need to consider the compounding effect of each monthly installment over the investment period. Here’s a simplified calculation:

We’ll use the formula for compound interest:



  • A = the future value of the investment
  • P = the principal investment amount (monthly installment)
  • r = the annual interest rate (as a decimal)
  • n = the number of times that interest is compounded per unit time (monthly)
  • t = the time the money is invested for, in years


  • P = ₹8,333.33 (monthly installment)
  • r = 0.12 (12% annual interest rate)
  • n = 12 (compounded monthly)
  • t = 10 years

Using these values, we can calculate the future value of the SIP investment:





So, the future value of the SIP investment after 10 years, considering monthly compounding, is approximately ₹2,760,052.

The calculation involves compounding the monthly investments at the end of each month for 10 years, factoring in the monthly return rate.


In this simplified example, the Lumpsum investment of ₹100,000 grows to approximately ₹310,584.77 after 10 years, while the SIP investment of ₹1,000,000 may also grow to an amount ₹2,760,052 due to the effect of compounding and rupee cost averaging over the long term.

Let us understand this by the below table:

Factors/Investment TypesLumpsum investmentSIP investment
Total Investment 1,000,000 1,000,000 ( 8,333.33 per month)
Time10 years 10 years
Annual Return Rate12%12%
Future Value of Investment 310,584.77 2,760,052

So, by the above table observation, we can say that the lump sum investment is good from a future return point of view as compared to SIP investment.

Remember If the time duration is one or a unit, the returns are the same.