How the mutual fund lumpsum Calculator helps?

Mutual funds are gaining popularity today in the market as an investment option due to its benefits of professional management, hassle free investing and power of compounding. Online mutual fund investment is the primary reason why more and more potential investors are choosing this way to start investing their hard earned savings and let it grow. It is convenient for them as with time, patience and right guidance, mutual funds can help one complete their desired financial goals. There are various methods for starting a mutual fund investment, but the two broadly known are – SIP and lumpsum. 

SIP or Systematic Investment plan is when an investor makes periodic investments in a chosen fund over a period of time. Contrary to this, lumpsum refers to a one-time investment in a mutual fund scheme chosen as per risk tolerance. This amount, is then allowed to grow with time to create a substantial corpus for the investor in future. If the investor chooses equity funds here, the time frame should ideally be a minimum of 5 years or more, and in case of debt funds (liquid funds, overnight funds), they can invest for shorter durations such as 1 year, 1 month or even lesser (few days). 

There are various types of returns that one can get from a lumpsum investment: Absolute, annualised, total, trailing, point to point and rolling, etc. It is imperative that an investor understands these, in order to make maximum benefits from their investments. In order to make it simpler, one can use an online tool called lumpsum calculator, which makes an estimate on how much your lumpsum corpus could be after a certain period of time. Here is how this tool can help you:

1. Mutual fund lumpsum calculator saves investors from the hassle of manual calculation, thus eliminating the possibility of human errors. 

2. It helps investors plan their finances more efficiently once they get an idea on how much they can expect from their lumpsum investment in mutual funds. 

3. Lumpsum calculator is convenient and easy to use. Being user friendly, investors gain confidence on making lumpsum mutual fund investments to secure their future. 

4. The calculator provides investors with a fairly accurate estimate. It is not possible to give the exact numbers here as mutual fund investments are subject to market risks. But, the tool helps to understand an estimated figure that helps investors to plan ahead. 

5. The lumpsum calculator asks for simple details like, investment amount, expected returns and the no. of investment years and gives the estimate in seconds as to what would be the future corpus after the investment period. 

Let us understand this better with a simple example – Suppose, you invest an amount of Rs 3 Lakhs in a mutual fund scheme for a period of 20 years. If the rate of return is assumed to be 12% p.a., your expected future corpus would be Rs 28,93,888. This calculation was done in seconds using the mutual fund lumpsum calculator. Once you know your amount to be invested and the tenure, this tool helps you in making an informed decision. 

In this read, we analysed and understood the concept of lumpsum investing and the lumpsum calculator tool that helps to know it better- lumpsum calculator. With careful planning and disciplined investing in mutual funds, one can use this method for reaching their future financial goals.