How lumpsum calculator helps in one-time investments
Mutual fund investments, a popular mode of investment in equity markets, is user friendly and a transparent way of converting your savings to a sustainable corpus for the future. Of course, this entails that you need to be patient and disciplined with the process, and also seek financial advice for making the best out of mutual fund investments.
A common way to invest in mutual funds is through SIP or systematic investment plan which most investors tend to choose but those who have a lumpsum amount to be invested would like to go for the lumpsum method also known as one-time investment. Novice investors do not have a grasp on the concept but this article will cover most aspects of it and help them navigate the way to lumpsum investments in mutual fund schemes.
A lumpsum investment is when an investor makes a one-time investment in a single transaction. Due to windfall gains, a bonus payment, profit earned on investments, sale of property or for any other reasons, an individual might end up having a substantial amount at disposal, which they would like to invest in one go. Based on risk appetite and financial goals, the investor can choose a set of mutual funds to invest the said amount. If the lumpsum investment is made for the long term, it can benefit by way of power of compounding and take care of the financial goals.
For better understanding and navigation of the process, tools like lumpsum calculator, can help in one-time investments. It is a free online tool where the investor can input some basic details, such as the one-time investment, tenure and assumed rate of return, the lumpsum calculator can give you an estimate on what the investor can expect in terms of future value of the one-time investments. Some of the benefits of using a lumpsum calculator can be as follows –
- It helps investors plan the one-time investment in mutual funds better, as they can estimate the maturity value of the investment.
- Using the lumpsum calculator saves time on making manual calculations and also the possible errors that can happen due to manual calculations.
- It is an easy and convenient tool, even for new investors.
- One should note that as mutual fund investments are subject to market risks, returns are not assured and can only be assumed.
One more online calculator that helps investors who are looking to earn a regular cash flow from their one-time investments is the SWP calculator. SWP generates regular income by redeeming units from your mutual fund investments. The number of units deducted or redeemed for each payout depends on the withdrawal amount and the prevailing NAV on the SWP date.
SWP in Mutual Funds India offers many advantages to the investors compared to drawing money from fixed deposits and conventional MIS schemes. If you remain disciplined and stay invested for the long term, SWP in mutual funds can generate better returns. Investors must use the SWP calculator and input the one-time investment amount, monthly SWP amount and the assumed returns, the calculator will show the cash flow along with a summary showing how long your corpus can sustain / or grow depending upon the inputs.
Lumpsum calculator is a convenient and useful tool for all kinds of investors who are looking to invest in mutual funds in lumpsum. Those investor who are looking for regular income from their one-time investments in mutual fund schemes can use SWP calculator to plan the future cash flow.