What is a lumpsum investment?
A lumpsum means investing a single large amount at once — for example, a bonus, maturity payout or savings — rather than monthly like a SIP. Over time, compounding can turn it into a much larger corpus.
Lumpsum vs SIP
A lumpsum puts all your money to work immediately, which helps when markets rise steadily. A SIP spreads investment over time and averages your buying price, which lowers risk in volatile markets. Many investors use both.
Where P = amount invested, r = annual return, n = number of years.
Worked example
₹5,00,000 invested for 10 years at an assumed 12% a year grows to about ₹15,52,924. Of that, ₹5,00,000 is your money and roughly ₹10,52,924 is growth — more than twice what you put in, entirely from compounding.
Stretch the same investment to 15 years and it reaches about ₹27,36,780. The extra five years contribute more than the entire first ten did, which is the single most important thing to understand about compounding: time does more work than the amount.
Reading the result honestly
- The rate is an assumption, not a promise. Market-linked returns vary year to year and can be negative. Try the calculation again at 8% and 10% to see how much the answer moves.
- Inflation eats part of the gain. The inflation-adjusted figure is what your corpus would actually buy, which is the number that matters for a real goal.
- Tax and costs are not included. Capital gains tax and fund expenses both reduce what you finally receive.
- Sequence matters for a lumpsum. Investing everything at once means the entry point affects the outcome far more than it does with a monthly SIP.
This is a projection tool, not investment advice. Nothing here is a recommendation to buy any product.
Frequently asked questions
Are the returns guaranteed?
No. Market-linked returns vary. This is an estimate based on the return rate you enter, to help you plan.
Why use the inflation-adjusted value?
It tells you what your future corpus is worth in today's money, so your goal stays realistic.
What return rate should I assume?
There is no correct answer, which is why the field is yours to set. Running the same calculation at several rates shows you a range of outcomes, and that range is more useful than any single figure.
How much difference does starting earlier make?
A great deal, because the last years compound on the largest balance. At 12%, five extra years on a ten-year investment adds more than the entire first decade produced. Waiting a year to invest costs more than picking a slightly worse product.
Does this apply to a fixed deposit?
The compounding maths is the same, but an FD has a rate fixed in advance rather than an assumed one, and the interest is taxed differently. Use the FD calculator for those.