Mutual Fund Investments can be done by investors in two ways - through SIP or Lump sum. Depending on one’s source and frequency of income, they can choose the method they want to opt for investment of their savings in mutual funds.

Sometime investors are confused between lump sum and SIP and thus they search for lump sum SIP calculator to plan their investments.

What is lumpsum calculator?
A lumpsum calculator help the investor estimate the returns on a lumpsum or one-time investments. It is an automated tool where the investors need to enter the details like the investment amount, period for which they want to invest and the expected rate of return. Once these details are entered, the lumpsum calculator calculates the maturity value of the lumpsum investment.

In a lump sum calculator a specific formula is used to compute the estimated returns on lump sum investments basis the assumed returns which is compounded -

A = P (1 + r/n) ^ nt
Here,
A = estimated returns
P = Present investment value
r = Expected rate of return
t = Investment tenure
n = number of compound interests in a year

Pratibha invests Rs 10 lakhs lumpsum in a mutual fund from where she is expecting 12% average which compounds annually. The estimated future returns, in this case would be: A = 10,00,000 (1 + 12/1) ^ 1/10

In this, the estimated returns for Pratbiha’s lumpsum investment at the end of 10 years would be Rs 31,05,848. As you can see this is a complex formula but using the lumpsum calculator it becomes so easy to know the results.

What is mutual fund SIP calculator?
Mutual fund SIP calculator is an online tool using which the investors can calculate the returns on their SIP investments. A mutual fund SIP calculator generally has three input boxes, they are -

Monthly SIP amount

SIP period

Expected annualized returns

Let us see an example – Suppose Pratibha wishes to start monthly SIP of Rs. 5,000 for 15 years and expects 12% return/. Once she input these values, the mutual fund SIP calculator will show her how much return she would earn from her SIP investment. In this example she would earn a total corpus of Rs 25.23 Lakhs against an investment of Rs 9.00 Lakhs.

As we can see in the above 2 examples, investing in mutual funds can be simple provided you are not confused with lumpsum and SIP investments. Do not search for lumpsum SIP calculator. Instead use a lumpsum calculator in case you want to invest onetime in mutual funds.

However, if you want to start a SIP in mutual funds, use mutual fund SIP calculator as it tells you exactly how much you can get after certain number of years from your SIP investment. You can also use the mutual fund SIP calculator in case you are not sure how much to invest monthly in order to reach your financial goals.

Both, lumpsum calculator and mutual fund SIP calculator can be very effective in performing complex calculations. Without the need of a pen or paper or Microsoft excel tool, you can arrive at the results easily which otherwise is complex.