How to use the lumpsum calculator
- One-time investment: the amount you are investing in one go, such as a bonus, an FD that matured, or money from a property sale.
- Expected return and period.
- Inflation (optional): used only to show the result in today's money, so you can see what it will really buy.
The lumpsum formula
Future value = P × (1 + r)n
where P is the amount, r the yearly return and n the number of years. The money compounds once a year in this calculator.
A quick mental check is the rule of 72: divide 72 by the return to get the years it takes to double. At 12% that is 6 years (the exact answer is 6.1). At 8% it is 9 years.
Worked example: ₹5 lakh at 12%
| Years | Value | In today's money (6% inflation) |
|---|---|---|
| 5 | ₹8.8 lakh | ₹6.6 lakh |
| 10 | ₹15.5 lakh | ₹8.7 lakh |
| 15 | ₹27.4 lakh | ₹11.4 lakh |
| 20 | ₹48.2 lakh | ₹15.0 lakh |
The last column is the sobering one. Your ₹5 lakh still grows a lot in real terms, but less than the headline number suggests. Plan your goals on the right-hand column.
Lumpsum, SIP or STP?
Putting a large amount into equity on one day means your result depends a lot on that day's market level. Two common ways to soften that:
- STP (systematic transfer plan): park the lumpsum in a liquid or short-term debt fund and transfer a fixed amount into an equity fund every week or month, over 6 to 12 months.
- Split by goal: money needed within three years should not go into equity at all, lumpsum or otherwise.
Over long periods, investing a lumpsum straight away has more often ended ahead simply because the money is invested for longer. An STP buys peace of mind, and that matters if a fall right after investing would make you sell. If the money will come in monthly instead, use the SIP calculator.
Questions people ask
How much will ₹1 lakh become in 10 years?
About ₹3.1 lakh at 12% a year, ₹2.6 lakh at 10% and ₹2.2 lakh at 8%. Returns from market-linked funds are not guaranteed.
Is lumpsum better than SIP?
For the same amount available today, a lumpsum is invested longer, so it can do better in a rising market. A SIP or STP spreads the entry points and reduces the risk of investing everything just before a fall. Which suits you depends on how you would react to an early loss.
What is the minimum lumpsum investment in a mutual fund?
Many schemes accept a one-time investment from ₹100 to ₹5,000, depending on the scheme. The scheme document lists the minimum.
How is the lumpsum return calculated?
With compound interest: amount × (1 + yearly return) raised to the number of years. The calculator compounds once a year.
Is the lumpsum return taxable?
Only when you sell. Gains on equity funds held over 12 months are taxed at 12.5% above ₹1.25 lakh a year. The mutual fund tax calculator works it out.