Lumpsum Calculator

Neither is universally better; it depends on your situation. A lumpsum compounds for the full tenure because all of it is invested upfront, so if you have the cash available and the market is not at a clear peak, a lumpsum will usually outperform a SIP of the same total amount over the same period. A SIP averages out your purchase price across months and years, which is useful when you cannot time the market or you fear investing at a high. SIPs also match how most people earn money (monthly income), making them easier to commit to over 10-20 years. Many investors with a windfall use a hybrid approach — invest part as a lumpsum and stagger the rest via an STP over 6-12 months.

The calculator uses the standard compound interest formula: M = P × (1 + r/n)^(n × t). Here P is your lumpsum principal, r is the expected annual return as a decimal, n is the compounding frequency per year (1 for annual, 4 for quarterly, 12 for monthly), and t is the tenure in years. The compound factor (1 + r/n)^(n × t) multiplies the principal — for example, at 12% annual return over 10 years compounded annually, the factor is (1.12)^10 ≈ 3.106, so a ₹1,00,000 lumpsum grows to roughly ₹3,10,585.

Mutual fund NAV changes every business day, so the actual compounding is effectively daily. For illustration purposes, most published lumpsum calculators (Groww, ET Money, ClearTax, fund factsheets) use annual compounding because that matches how CAGR is reported. Monthly compounding produces a slightly higher figure for the same nominal rate (e.g. ~₹3.30 Lakh instead of ~₹3.11 Lakh on ₹1L at 12% over 10y) because interest is added more often. If you are comparing against an FD or a bank product, choose the compounding that matches that product. For pure equity mutual fund illustrations, annual is the standard.

No. This calculator assumes a constant rate of return for the entire tenure, but actual market returns vary year to year — sometimes substantially. Equity mutual funds have historically averaged around 12% over long horizons, but individual years can range from a 40%+ gain to a 30%+ loss. The calculated future value is a planning estimate, not a guaranteed outcome. Past performance is not indicative of future results. For specific investment advice, consult a SEBI-registered investment advisor.