What is a Lumpsum Calculator?
A lumpsum investment is a single amount left to compound, as opposed to a SIP where you add to it every month. The arithmetic is the simplest in personal finance and the assumptions behind it are the hardest.
Enter the amount, the return you are assuming and the number of years. The tool returns the future value, the gain and a year by year table.
The return you type is an assumption, not a rate you have been promised. Market returns arrive unevenly and the order matters: the same average over the same period produces different outcomes depending on when the bad years fall. Treat the output as a planning figure and not a forecast.
Frequently asked questions
What is the difference between lumpsum and SIP?
A lumpsum is invested once and compounds from day one. A SIP adds a fixed amount monthly, so each instalment compounds for a shorter period, and it averages your purchase price across the period rather than committing at one price.
What return should I assume?
That is a judgement, not a number a calculator can supply. Use something you can defend, look at what the asset class has actually returned over long periods, and try a pessimistic figure as well to see how much the plan depends on the optimistic one.
Does this account for inflation or tax?
No. The figure is nominal. Subtract inflation to see what it is worth in today’s money, and apply capital gains tax to the gain to see what you keep.
Is lumpsum better than SIP?
Historically, investing earlier has tended to win when markets rise over the period, because the money has longer to compound. A SIP reduces the risk of committing everything at a bad moment. Which matters more depends on how much you would regret the bad case.