If you plan on investing your money in a mutual fund, there are two options available, i.e., systematic investment plan (SIP) and lump sum investment. In SIP, you invest a fixed amount every month in the mutual fund, whereas under the lump sum option, you invest a huge amount in one go.
Many investors prefer the lump sum mode as it is a simple method. If you are also looking to make a lump sum mutual fund investment, using a lumpsum investment calculator will be useful. Using this tool will help you know your investments in a better way. Read on to learn more about using a lumpsum calculator.
Benefits of Lumpsum Investment
Many investors choose lumpsum investment as their preferred option because it is effortless. Though, there are many other benefits of the lumpsum investment that you must know about. Some of the best benefits are listed here for you:
- Easy to understand: Unlike a SIP, in a lumpsum investment, you do not need to have deep knowledge of finance. It is simple to learn and takes only some basic skills to execute. You can use this option even if you are new to investments.
- Last-minute tax savings: Lumpsum investment in ELSS schemes allows you to save on your income tax. Under Sec 80C of the Income Tax Act, 1961, you can avail of tax deductions of up to Rs. 1.50 lakhs for investing in ELSS mutual funds.
- Good returns: As you invest this amount as a lump sum, you earn interest for the entire year. This benefit enables you to earn a good return on your money, helping you create wealth for the future.
- Long-term investment: You can use this option to plan long-term investments. It is an ideal option for investors who want a longer tenure.
- Simple to invest: In lumpsum investments, you do not need to keep a track record of the dates like SIP. Here you can invest the money as and when you like. No penalties can be levied in case of any delays.
- Easy to calculate: You can easily calculate key aspects of your investment in the case of lumpsum investment as compared to SIP. There is no need for complex formulas to complete the calculations.
What is a Lumpsum Calculator?
A lumpsum investment calculator is a free online tool that helps you check the returns you can make on your lumpsum investments. It is widely used for planning lump-sum mutual fund investments. Having a simple interface, a lump sum SIP calculator enables you to enter basic details to get useful details on planned investments.
Some details required in a lumpsum calculator are the investment amount, period, and annual rate of return. Within a few seconds, the calculator will provide the required data on the screen. You can then make your decision based on this information.
How to use a Lumpsum Investment Calculator?
Before you use a lump sum SIP calculator, it will be useful to know how to use a lumpsum calculator. Only some basic details are required to get the desired information. Here are the steps you must follow to use this lumpsum investment calculator: –
- Log on to your preferred online platform or mobile app featuring a lumpsum calculator.
- Click on the link for the lump sum SIP calculator.
- Firstly, you must enter the amount you want to invest as a lump sum.
- Then, you must enter the duration for which you need to invest the money.
- Now, you should enter the expected rate of interest.
- You will now see the required details on your screen in the form of the total amount and interest earned during the period.
- You can see the results in table or graph form on some platforms.
Benefits of Using a Lump Sum Calculator
With the help of a lumpsum investment calculator, you can quickly check your future wealth. It is an effective way to plan your investments to ensure stable finances. Using this calculator will offer you every important detail in a few seconds. Some of the benefits of using a lump sum SIP calculator are listed here: –
- Easy to use: – Online lumpsum investment calculator is very easy to use. You do not need any previous financial knowledge to use it. You also do not need any expertise in lump-sum calculations to enjoy the benefits on offer.
- Ease of access: – You can use a lumpsum calculator as per your choice, as many platforms offer this service. You need an internet connection to use this tool as and when required.
- Quick calculations: – Lumpsum calculator will show you the results in a few seconds. You need to provide some basic details to get the results. This helps you plan your investments in a better way.
- Select a suitable option: – Many investors use this tool to identify the most suitable mutual fund for their future needs. They use the mutual fund’s average returns over five years to see if it will help them meet their goals.
- Set financial goals: – Online lumpsum investment calculator can help you set your financial goals in a better manner. This tool allows you to adjust parameters to create the best combination for your needs.
Lumpsum investment is a good option for all investors new to savings. With basic knowledge of savings and investments, you can start your journey with lumpsum investment. In the case of mutual funds, it is a common approach that many investors use. If you are also keen on making lumpsum investments, use a lumpsum calculator to plan your finances. This will help you from making any rash decisions.