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How to use the lumpsum calculator
- 1Enter the one-time amount — a bonus, a maturity payout, accumulated savings.
- 2Set the expected annual return; long-run Indian equity averages are commonly assumed at 10–12%, debt at 6–7%.
- 3Set how many years the money stays invested.
- 4Read the maturity value and wealth gained; adjust the return to see optimistic and pessimistic cases side by side.
The arithmetic, and the honesty it needs
A lumpsum projection is the simplest formula in finance — amount × (1 + return)^years — and the least certain input dominates it. The rate you type is an assumption about markets, not a promise from anyone. At 12%, ₹5,00,000 becomes about ₹15.5 lakh in ten years; at 8% it becomes ₹10.8 lakh. Both are the same investment; the difference is entirely the assumption.
The practical use of the calculator is therefore not one number but a range: run it at a hopeful rate, a historical rate and a miserable rate, and treat the spread as the honest projection. Any single figure carried to four digits of precision is false comfort.
Compounding rewards time disproportionately: the same amount at the same return earns more in years 11–20 than in years 1–10. That asymmetry — visible immediately by toggling the years field — is the entire argument for investing windfalls early rather than parking them indefinitely.
Lumpsum or SIP — the real question
When people ask whether to invest a windfall at once or spread it out, the arithmetic answer is clear and the psychological one is not. Mathematically, markets rise more often than they fall, so investing immediately beats spreading in most historical windows. Emotionally, deploying everything the week before a crash is the regret people actually fear, and a 6–12 month staggered entry (an STP, in mutual fund terms) buys peace of mind at a modest expected cost.
Run both here: this page for the immediate lumpsum, the SIP Calculator for the staggered version at the same total. The gap between them is the price of comfort, stated in rupees.
For short horizons — money needed within three years — the equity assumption itself is the mistake, whatever the entry method. Use a debt rate in the calculator, or better, the FD Calculator, and accept the smaller number.
What the projection ignores, on purpose
Taxes, exit loads and expense ratios all trim the real outcome. Equity gains above the annual exemption are taxed, debt gains at your slab; a fund's expense ratio quietly compounds against you exactly as returns compound for you. A 12% gross assumption with a 1.5% expense ratio is really a 10.5% projection — enter the net figure if you want the honest curve.
Inflation is the other silent variable: ₹15 lakh a decade from now buys what roughly ₹8–9 lakh buys today at 6% inflation. A quick trick — enter the real return (expected return minus inflation) and the output reads directly in today's purchasing power.
None of your figures leave the browser. Like every calculator on this site, the arithmetic runs locally; amounts and horizons are never uploaded.
Frequently asked questions
What return should I assume?
For long-horizon Indian equity, 10–12% is the commonly used band, well below the best years and above the worst. For debt, 6–7%. The more useful habit is running three rates — pessimistic, historical, hopeful — and planning around the range.
Lumpsum or SIP — which earns more?
Historically, immediate lumpsum investment wins more often than not, because markets spend more time rising than falling. SIPs and staggered entries win psychologically — they remove the risk of regret about timing. Compare both on this site at the same totals and decide with the gap in view.
Does this account for inflation or tax?
Not automatically — projections here are gross. Subtract expected inflation from the return to see today's-money results, and remember gains are taxed on redemption; the Income Tax Calculator covers the slab side.
Is compounding here yearly?
Yes — the standard convention for market projections, where the 'rate' is an annual CAGR. Bank products that compound quarterly are better served by the FD Calculator, which models the actual credit cycle.
Is anything uploaded?
No — one formula, evaluated in your browser. Nothing you type is transmitted.