Lump sum calculator is an app which let you determine the maturity amount of a present value lump sum investment (one time investment), after a fixed number of years.

You need following input data to compute the maturity amount of lump sum investment.

- Amount to be invested
- Number of years ( time period of investment)
- Expected rate of return

The lump sum calculator provides you the maturity amount and the earning on the investment.

**Pros of lump sum investment method**

- In some cases, you get pretty sum of money at one go. Followings are some examples of such cases.
- Salaried person gets yearly bonus
- Money received from sale of property/assets
- Money received from matured investment
- Money received as one time settlement of any dispute

In such cases, you can invest your precious money in mutual fund in one go (lump sum). It is not better to hold huge amount in bank account and invest in SIP from that money per month because you will lose difference of bank interest rate and expected return rate of mutual fund. Basically, rate of return of mutual fund is in two digits and bank interest rate is in single digit.

- Generally people believe that one has to invest per month in mutual funds. It is not true. Lump sum investment is boon for those who have irregular income and avoid to invest per month. People with irregular income can invest in mutual fund any time with small savings from their income. Most of lump sum scheme in mutual fund allows you to invest with minimum Rs 5000. You have to make payment only once so you will have no worry of future installments.
- A lump sum investor has always chance to change the amount being invested. So he can invest more money when markets are down and invest less amount of money when markets are up. A lump sum investor can take advantages from ups and downs of markets. So experienced and high net worth investors opt for lump sum investment.
- Lump sum investment is better for long term. Here long-term means more than 15 years. Lump sum investment can be made for goals like child’s marriage, child’s higher education etc.

**Cons of lump sum investment method**

- Lump sum investment is irregular investment. This method makes investor irregular and care free of regular savings.
- Lump sum investment is better for long term. But if you need fund in near future, the rate of return will be low in lump sum investment.
- In lump sum method, investor invests his money in one go, so there is chances of high risk. Suppose you invest Rs 10,000 and buy units of mutual funds. If the market declines more, you lose the chance of buying more units in the same amount. So in lump sum investment, investor has to time the markets properly before making investment.

**Comparison between SIP and Lump sum investment**

- The main difference between the SIP and lump sum method is that the timing of investment matters very much in lump sum investment while in SIP method, the time of entry doesn’t matter. If you chose improper time to invest in lump sum method, your investment will be costly and you will have more market risk. Concept of rupee cost averaging works in SIP therefore your investment in SIP never be costly.
- SIP is good option for both medium term investment like 3 to 5 year and long term investment like over 10 year while lump sum investment is good only for long term investment.
- Lump sum investment is more recommended than SIP in continuously growing markets.
- SIP is more recommended than lump sum investment in falling NAV (net asset value).

If you have regular income, you should go for SIP because SIP is less risky and fetches more return on investment.