Recently, an old picture of Bill Gates surfaced on Twitter showing that a CD-ROM could hold more information than lakhs of papers combined. That’s the power of technology! The investment world, too, has gained from its advancement. For example, you can invest your money online in no time, you can track and manage your investments from the comfort of your house, or you can even use an online calculator to calculate your returns and plan your investments better.
Out of the many calculators available, let’s learn about a lump sum investment calculator today. And before knowing about it, let’s first understand what a lump sum investment is.
Lump sum investments explained!
It is nothing but investing your money at once. While most investments work like this by default, you get a choice between a lump sum investment and a Systematic Investment Plan (SIP) in the case of mutual funds. The former allows you to make a one-time investment whereas the latter allows you to invest in parts.
While SIPs offer more benefits, you can make a lump sum investment when you have surplus funds such as a bonus or cash gift. But remember, before investing your money, you must consider your goals, risk appetite, and investment tenure. Also, to make the most out of your lump sum investment, it is essential to time the market nicely. Usually, such investments are suitable for seasoned investors who understand the market well.
No matter what you choose, you can always use a calculator to estimate your returns and plan your investments. For lump sum investments particularly, you can use a lump sum investment calculator.
What is a lump sum investment calculator and how does it work?
10/10 for guessing that a lump sum investment calculator has got something to do with lump sum investments in mutual funds. But what is it exactly?
It is an online tool that helps you estimate the returns on your lump sum mutual fund investment. It simply helps you see the maturity amount of your one-time investment made for a specific tenure.
To get an idea about your future investment value, you simply have to enter certain details such as your investment amount, investment period, and the expected rate of return.
Some lump sum calculators also give you the total investment value of your actual investment already made in a particular mutual fund scheme. To calculate the result, you must enter a few details such as the type of mutual fund, scheme name, investment amount, start date, and end date. The calculator will then show you the return rate of your chosen scheme, your investment value as well as the gains or losses from your investment.
With the first type of lump sum calculator, you can enter different values to understand how they impact your returns. It will equip you to make better long-term and short-term investment decisions.
For example,
Above is only for illustration purpose
What are the benefits of a lump sum investment calculator?
- With return estimates from different types of schemes, you can invest wisely.
- You get an idea about your future investment value and, thus, come to know if your investments can help you meet your financial goals.
- Knowing the maturity value, you can better plan other aspects of your finances, including taxes.
- The actual formula to manually calculate your returns is complex. But a calculator is easy to use and provides quick results.
- Since it is online, you can use it anywhere anytime.
- It eliminates the possibilities of human errors.
To sum it up
Investing involves a lot of numbers. But online tools such as a lump sum investment calculator make the journey easier. They are simple, provide fast results and thereby help in making better investment decisions.
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
