If investors prefer to invest in mutual funds traditionally, they can consider investing a lump sum in the mutual fund scheme of their own choice to ensure their returns relatively grow over time. While many investors prefer Systematic Investment Plans (SIPs) in mutual funds, one-time investments retain their appeal for some individuals because, by investing large sums early, investors may benefit greatly from combining power, which might help them get better returns over time. In this blog, we’ll be discussing the utilisation process of the lump sum investment calculator and how it is beneficial in helping us to make informed decisions.
What is a lump sum investment calculator?
A lump sum mutual fund calculator is a tool that allows investors to calculate the likely value of their investments using a compound interest formula. The power of a one-time investment might help them earn slightly better returns in the long run. To use a cash flow calculator, all they have to do is record the total investment, expected return, and investment horizon to determine the future value of their investment value will be available at the click of a button. Some people confuse or incorrectly refer to SIP accounts as stacked SIP accounts. However, the correct term is lumpsum investment calculator. In contrast, if the investors invest in mutual funds with a SIP, they should use an SIP calculator to find the likely value of their investment.
How can a lump sum calculator help you?
A lump sum investment calculator is one of the many mutual fund calculators available online these days. It might help the investors in the ways mentioned below:
- Know the expected return: Mutual fund calculations might be time-consuming if done manually. A one-time calculator helps investors to instantly know the estimated future value of their investment with a few clicks.
- Choose the right timing: Once the investors decide on the amount to invest, they may change the timing on the lump sum account to get results. Having the right timing may help them plan their investment.
- Align investments with financial goals: The important part about using a lump sum investment calculator is that investors might change the value of the investment to suit their financial goals.
How does a lump sum investment calculator work?
A lump sum calculator is a sophisticated yet very handy tool that helps investors calculate their mutual fund returns. It performs a complex calculation of compound interest in seconds to calculate expected returns using only three currencies. Investors might change the numbers in the slots shown or move the slider to see how the returns change by different currency/period/interest rates. Additionally, they can change the value of their investment to adjust the expected return as per their wish.
How to use a lump sum calculator?
Step 1: Enter the total amount invested in the mutual fund.
Step 2: Enter the period in years for which the predicted return is required ranging from 1 year to 30 years.
Step 3: Enter the expected price. Once that info is entered, the lumpsum calculator will come up with the predicted price of the investment.
Advantages of the usage of a lump sum calculator:
- Ease of use: Since a lump sum investment calculator is a loose device to be had online, investors may easily use it each time and everywhere to realise their expected value from mutual fund investments.
- Get the nearest estimate: The returns from mutual fund investments are not fixed because of the dependency on marketplace moves. Yet, the lumpsum calculator offers the most viable estimate of the funding price.
- Plan the Investment: There is not any limit or fee on how many times the values within the lump sum calculator can be traded to get the desired results. This will let the investors plan their investments and assist them in achieving their monetary goals.
Conclusion:
A lump sum investment calculator is an internet tool that might help investors calculate the capacity fee on a lump sum funding in a mutual fund. It takes into consideration the preliminary funding amount, the expected charge of return, the funding horizon, and other applicable elements to provide an estimate of the capacity investment value. Moreover, a lump sum calculator is also helpful for those who wish to invest in flexi-cap funds.
Disclaimer: Mutual fund investments are subject to market risks, read all scheme related documents carefully.
