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When it comes to investment planning, two commonly used tools are the Lumpsum Calculator and the SIP (Systematic Investment Plan) Calculator. Both serve as valuable resources for investors, aiding in decision-making and goal-setting. However, they operate on different principles and cater to distinct investment strategies.
This post helps us understand these two crucial financial tools, and look into what each calculator entails and how they differ from each other.
Page Contents
Understanding the Lumpsum Calculator
The “Lumpsum Calculator” allows all investors to estimate how much they will earn when they invest in a mutual fund (MF). This calculator will deliver an analysis of the maturity amount for an acquisition made in the present day.
By utilising this tool, you can witness the revenue you made during the whole investment time for the amount you funded. Simply provide the number of years you wish to invest, the expected yearly return, and the investment amount.
In a few seconds, the lumpsum calculator will show how much you will gain and the expected amount. Besides that, it also considers certain aspects when conducting calculations, such as the time horizon, the interest rate, and the initial amount.
Advantages of Using The Lumpsum Calculator
The lumpsum calculator can provide unique benefits to all investors. Some of them are mentioned below:
1. Easily Accessible: The lumpsum calculator is easily accessible to individuals and is available free of cost. This helps people manage their funds perfectly and also improves their monetary knowledge.
2. Simple Calculation: Using this financial tool will prevent you from conducting manual calculations. With this tool, you can receive an accurate and instant valuation of potential profits.
3. Smooth Financial Preparation: The Lumpsum Calculator is essential for financial planning. It can help you protect the returns of your lump sum mutual fund investment accurately.
4. Helps Make Correct Decisions: By using this tool, investors can gain an excellent understanding of their financial goals. Moreover, it also provides them with the conviction to make informed judgments.
5. Easy-To-Use Interface: This exceptional financial tool has a user-friendly interface. Both investors and non-investors can effortlessly access it, regardless of their monetary expertise, making the Lumpsum Calculator stand out as a valuable tool for a broader audience.
The SIP Calculator – What is It?
The Systematic Investment Plan (SIP) Calculator can estimate the revenue of all mutual fund (MF) investments effectively. But you can only do so before investing in the MF through the periodic investment plans.
The tool will enable all investors to integrate the SIP investments into their portfolio. The SIP Calculator also considers certain aspects, such as expected return rate, SIP amount, duration, and frequency.
What are the Benefits of Using the SIP Calculator?
This financial tool also has some great advantages, which investors must be well aware of:
1. Unique Investment Plans: The tool provides personalised suggestions according to individual monetary preferences and capabilities. This ensures all investors get an investment plan that matches their risk profiles and objectives.
2. Accessible to All Budgets: The SIP calculator is also beneficial for investors with limited funds. It will recommend products that fall under an affordable price range. It proves that investing in MF (Mutual Funds) is not only for all individuals with a higher net worth.
3. Maximises the Compounding Advantages: This tool will allow you to study mutual funds with steady growth possibilities. It will also let you maximise the compounding benefits.
4. Provides Online Access: You can access this affordable and convenient financial tool from a online platform whenever you want. Investors can access it from various gadgets such as laptops, mobiles, desktop tablets, etc.
5. Offers Suggestions on Strategic Investment: The calculator offers guidance on factors like duration, investment amount, and diversification. It also ensures investors get to make the right decision based on their risk profiles and monetary objectives.
Key Difference Between Lumpsum Calculator and The SIP Calculator
The SIP and lump sum calculators are important tools for all investors. But both of them are different from one another. The table below provides a detailed explanation of their differences:
| Characteristics | Lumpsum Calculator | SIP Calculator |
| The Tool is Ideal For | Lumpsum MFs for long-term goals or immediate investment | Long-term investment objectives with systematic funds |
| Risk Moderation | Subject to market conditions during the time of investment | Reduce the market volatility with the rupee-cost averaging |
| Method of Investment | Invest a huge amount at once | Invest a fixed sum regularly |
| Return Estimation | Based on the amount invested and its growth over time | Based on the revenues during the investment period. |
| Investment Incidence | The investment is made just once | Investment is made regularly |
| Flexibility of the Investment | Fixed investment sum on a single occurrence | Provides suppleness on investment regularity and sum |
| Risk Involved | Investments done during market peaks lead to higher risks | Fewer risks are involved because of the regular investment method. |
| Cost Averaging | Investment takes place at one price | Takes the help of the rupee cost-averaging |
| Market Fluctuations | Chances of market fluctuations during the investment time | Low market fluctuation because of regular investment |
Conclusion
The Lumpsum and SIP Calculators are important and powerful tools for investors. Both are designed for different risk appetites and monetary goals. These tools are ideal for individuals who want gradual wealth accumulation over time. Banks, like ICICI Bank, also provide the Lumpsum and SIP Calculators on their websites, completely free of cost. To use the tools, you can just visit their website and then press on the “SIP calculator” or “lumpsum calculator” option. It doesn’t take much time to perform the computation. Once you provide the information, you will get the results soon.
When you understand the benefits and nuances of these tools, you can make informed judgments in a hassle-free method. You will easily find these tools available on different financial platforms.
