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If someone wants to invest in mutual funds, they have two options. Those two options are Lumpsum and SIP. SIP is making monthly investments into your fund in small amounts. Lumpsum is when you make a significant investment in mutual funds on a specific scheme. Both categories have their pros and cons. People who cannot afford to make a Lumpsum investment usually prefer SIP. At the same time, lumpsum is preferred by many investors as it offers higher returns. Although, no one can give you a fixed amount of returns in mutual funds as it depends upon the fluctuations in the market. You can still calculate the approximate returns with the help of a lump sum sip calculator in India.
Tools to get an estimate on your mutual fund investment
The formulas to calculate returns for lump sum and SIP will be discussed below. However, if you do not want to go through the hassle of getting into these calculations yourself, lumpsum sip calculators are available online. You will only be required to fill in a few details, and your estimated returns will be calculated for you in no time.
Advantages of using an online calculator
Mentioned below are the benefits of using a lumpsum sip calculator to calculate your lump sum investment:
Get an estimate of the returns.
Investing is a smart move to manage your finances, but what’s smarter is keeping track of these investments. Investment is not something that you can do and forget about for months or years. Getting an estimate on your returns will give you a clear picture of the returns that you will be receiving on your investment. Such clarity can help you achieve your financial goals sooner.
No scope for calculation error
No matter how good you are at mathematics, there is always some scope for error if a human is doing a calculation. Even if you are confident about the calculations, you will have to recheck them at least twice to ensure that you got them right. Lumpsum calculator saves you the time and energy it takes to manually calculate something. Additionally, it provides you with accurate results instantly. You will only need to fill up three or four necessary details, and voila! You have the correct calculations of your returns in front of you.
Plan your finances accordingly.
Knowing where your investments will stand a few years down the line gives you the flexibility to plan your finances accordingly. If you find the returns will be good, you can plan to invest in other places stress-free. On the other hand, if you are unhappy with the returns and feel you will need more money by that time, you can make arrangements for it.
Formulas used by lump sum sip investment calculator
Formula to calculate lump sum investment
Following is the formula to calculate mutual fund lump sum investment returns:
F = P (1+r/n)^nt
Where,
F stands for future value,
P stands for the present value,
r is the rate of return,
n is for the number of compounded interests in a year,
And t stands for the duration/tenure of the investment
For instance,
If you invest INR 10,000 with a 12% interest rate for a 2-year tenure compounding every six months, the estimated investment returns will be INR 2,544.
Formula to calculate SIP
The formula to calculate estimated returns on your SIP investment is as follows:
M = P x ({[1 + i] n-1}/i ) x (1 + i)
Where,
M stands for the maturity amount,
P stands for the amount invested at regular intervals,
n refers to the number of payments,
And, i stands for the periodic interest rate
For example, if you invest INR 5000 with an interest rate of 12% for a tenure of 10 years, the estimated returns will be INR 5,61,695.
You can use these formulas to calculate your estimated returns yourself or use the lump sum sip investment calculator with the steps discussed below.
Steps to use the lump sum investment calculator
Following are the steps to calculate the estimated returns on your mutual fund investment:
● Search lump sum calculator online
● Visit a trusted platform and go to their ‘calculators’ section.
● You will be able to view an option called ‘lumpsum calculator.’
● Once you successfully open the calculator, it will give you the option to fill in the required details, such as total investment, expected return rate, and period.
● You can manually fill in these options in the given space or scroll the bars under each option, dragging them to the correct numbers.
● Once you have selected the options, you will see your invested amount, estimated returns, and total value under the pie chart.
Steps to use the SIP calculator
You will easily be able to calculate your estimated returns with the help of the sip lumpsum calculator. The steps to calculate the same for SIP are mentioned below:
● Open the SIP calculator on your preferred platform.
● Go to their ‘calculators’ section and click on ‘SIP calculator.’
● It will redirect you to a page wherein you will be required to fill in the necessary details to calculate your estimated returns.
● Fill in your monthly investment, expected return rate (p.a.), and the period in the given space, or drag the bars to the correct digits under each option.
● Once you have selected the suitable options, your invested amount, estimated returns, and the total value will be calculated and displayed on your screen automatically.
Summary
If you invest in mutual funds, it is high time you know about the lump sum sip calculator in India. It can be of great advantage to an investor. It makes calculating estimated returns on your investment, whether it is lumpsum or SIP, a lot easier. It eliminates the need to calculate returns manually and hence, avoids errors. This calculator can be used in a few simple steps online. It helps you to understand your investments, putting you in a position to plan your finances better.
