💰 Lumpsum Calculator
A one-time investment left to compound. This shows what it matures to, and compares it directly against spreading the same total into monthly instalments, which is the question most people are actually asking.
One investment, left to compound
A lumpsum is the simplest investment there is: put money in once, leave it, and let compounding work. The entire result comes from three numbers, and the one that matters most is the one people pay least attention to.
maturity = P × (1 + r)n
Why the exponent dominates
| Years | At 8% | At 10% | At 12% | At 14% |
|---|---|---|---|---|
| 5 | ₹7,35,000 | ₹8,05,000 | ₹8,81,000 | ₹9,63,000 |
| 10 | ₹10,79,000 | ₹12,97,000 | ₹15,53,000 | ₹18,54,000 |
| 15 | ₹15,86,000 | ₹20,89,000 | ₹27,37,000 | ₹35,69,000 |
| 20 | ₹23,30,000 | ₹33,64,000 | ₹48,23,000 | ₹68,70,000 |
| 25 | ₹34,24,000 | ₹54,17,000 | ₹85,00,000 | ₹1,32,30,000 |
Look along the bottom row. Two extra percentage points of return, from 12% to 14%, adds ₹47 lakh over 25 years on the same ₹5 lakh. Two extra points is also roughly what an expensive fund costs you in fees, which is why the expense ratio is not a detail.
CAGR, and why average return lies
Compound annual growth rate is the single rate that would have produced your actual result. It is not the average of the yearly returns, and the gap between them is caused by volatility:
CAGR = (final / initial)1/n − 1
A fund returning +50% then −30% has an arithmetic average of +10%, but ₹100 becomes ₹105, a CAGR of 2.47%. The more volatile the returns, the further the average sits above the CAGR. Any fund advertising its average annual return rather than its CAGR is telling you the flattering number.
Lumpsum or spread it out
Historically, investing a lumpsum immediately has beaten spreading it over several months about two thirds of the time, simply because markets rise more often than they fall. The third of the time it loses, it can lose badly. The honest framing is that drip-feeding buys insurance against regret, and like all insurance it has a cost.
A common middle path with a large sum is to invest it over six to twelve months. The SIP calculator shows what the drip-feed version produces.
Inflation turns a big number into a smaller one
That ₹85 lakh after 25 years at 12% is in future rupees. At 5% inflation it buys what about ₹25 lakh buys today. The real CAGR is (1.12 / 1.05) − 1 = 6.67%, not 7%. For any horizon beyond a decade, run the figure through the inflation calculator before deciding the plan is adequate.
A worked example
₹8,00,000 invested for 12 years at 11%. The maturity value is ₹27,98,000, a gain of ₹19,98,000, multiplying the money 3.5 times. Spreading the same ₹8,00,000 as ₹5,556 a month over the same twelve years would reach about ₹17,60,000, roughly ₹10.4 lakh less, because the average rupee was invested for six years rather than twelve.
Two neighbours worth knowing: the SIP calculator, for the question this one leads into, and the compound interest calculator, which answers it from the other direction.
Frequently Asked Questions (FAQs)
Is a lumpsum better than a SIP?
At a constant return, yes, because every rupee compounds for the full period. In reality it depends on what the market does next, and a SIP protects you from investing everything immediately before a fall. Historically the lumpsum has won around two thirds of the time.
What is CAGR?
The single annual growth rate that would turn your starting amount into your final amount over the period. It is lower than the arithmetic average of yearly returns whenever those returns vary, and it is the honest measure of how an investment actually performed.
Should I invest a large sum all at once?
If the horizon is long and you would not panic in a 30% drawdown, yes. If a fall immediately after investing would make you sell, spreading it over six to twelve months is cheap insurance against your own reaction, which is usually the bigger risk.
How long does money take to double?
Divide 72 by the return. At 12%, six years; at 8%, nine. Over a 24-year horizon at 12%, money doubles four times, turning ₹1 into ₹16. That is the whole argument for starting early rather than contributing more later.
Does this include tax?
No, it projects gross returns. Capital gains tax applies on redemption, at a rate depending on the asset and holding period, and dividends may be taxed as they arise. The after-tax CAGR is typically one to two percentage points below the gross figure for equity held long term.
What return should I use?
Match it to the asset. Ten to twelve per cent for diversified equity over a long horizon, six to eight for balanced funds, and whatever the contracted rate is for fixed deposits. Using an equity assumption for a debt investment is the most common way these projections mislead.