Lumpsum Calculator

How Does the Lumpsum Calculator Work?

The Lumpsum Return Calculator operates on the principle of compound interest, illustrating how your initial investment grows when earnings are reinvested. While the market's actual performance will dictate accurate returns, the calculator estimates based on your inputs.

The formula to calculate the returns on a lump sum investment is 

Let us understand with an example:

Imagine Neha invests Rs. 50,000 as a lumpsum in a fund with an expected annual return rate of 15% for a duration of 5 years, with interest compounded annually.

Using the formula: A=50,000(1+0.15/1)(1∗5) 

On solving the equations, we get the following results: 

As you can see, manually calculating this, especially with varying compounding frequencies, can be complex and time-consuming. This is where a lumpsum calculator becomes invaluable, providing instant, accurate estimates.

In Neha's scenario, her estimated total maturity amount would be approximately Rs.₹1.01 L, with an interest earned of around Rs. 50.6 K

How to Use Policybazaar’s Lumpsum Calculator?

Follow the steps mentioned below:

Step 1: Go to Policybazaar's official site.

Step 2: Find the Lumpsum Calculator tool.

Step 3: Input the investment amount, annual return rate, and investment duration in years.

Step 4: Analyze the projected returns.

Step 5: Click on “View Plans” and check for any additional advice or information provided based on the results.

Step 6: Consult a financial advisor for important investment decisions.

How Does a Lumpsum Calculator Help You?

A Lumpsum calculator is essential for financial planning, allowing you to visualize how your investments might grow over a specific period. This foresight empowers you to make more informed investment decisions and align your investments with your financial goals. 

Before getting into the benefits of using this calculator, one must know the types of return for a lumpsum investment, availing the maximum benefits from their mutual fund investments.

• Absolute Return 

• Total Return

• Annualized Return

• Point-to-Point Return

• Trailing Return

• Rolling Return

Advantages of Using Policybazaar’s Lumpsum Calculator

Here are the advantages of using Policybazaar’s one-time investment calculator:

• Risk Assessment: By inputting your investment amount and expected rate of return, the Policybazaar’s Lumpsum Calculator helps in assessing the risk associated with your chosen. 

• Estimated Returns: With the help of Lumpsum Calculator of Policybazaar, you get the estimated returns for the whole investment period. You may calculate your investments’ 1-year, 3-year and 5-year returns using this calculator.

• Time-Saving: Calculating potential returns manually can be time-consuming and prone to errors. The Policybazaar’s Lumpsum Calculator automates this process, giving you quick and reliable results.

• Goal Customization: Whether you’re planning for your retirement or saving for a major purchase, the calculator can tailor projections to match your unique financial goals.

• Adjustable Variables: You can experiment with different investment amounts and expected rates of return to find an optimal strategy that aligns with your risk profile.

• Quick and Convenient: Policybazaar's Lumpsum Calculator provides a swift and hassle-free way to estimate potential returns on your lump sum investments.

When Should You Prefer Lumpsum Investment?

Lumpsum investments are particularly suitable when you have a substantial amount of capital available upfront. This approach is often favored when you believe that the market conditions are favorable, such as during a period of expected growth or a bull market. Additionally, for long-term financial goals like retirement planning or purchasing a home, a lump sum investment can potentially lead to higher returns over time compared to periodic investments.

Note: You can use the SIP calculator to calculate your returns on investment.

Wrapping it up

Investing via SIP or Lumpsum solely depends on the investor. However, if you are confident to invest your money via the Lump Sum method, it is beneficial for you to use the one time investment calculator first. Calculate how much amount you need to invest to achieve your financial goals.