Published: 5:38 PM, Apr 8, 2025
|Updated: 12:07 PM, Apr 16, 2025
SIP (systematic investment plan) or lump sum (one-time) investment is a way to invest in mutual funds. In SIP, investors can invest a fixed amount daily, weekly, monthly, quarterly, half-yearly, and yearly, while in one-time investment, you just need to invest a sum for a long period to grow your money. In this article, we will discuss the benefits of a one-time investment in mutual funds and also calculate how much time it will take to create Rs 10 crore corpus by investing Rs 11 lakh.
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A lump sum investment involves investing a big amount in the market at once. This method may be especially useful in a rising market since it permits the total amount to possibly expand from the start. However, it carries a larger risk, particularly in volatile markets, because the full amount is exposed to market movements at once.
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In equity funds, the investment should be done for atleast three years to earn benefits. For short-term goals, it might be better to go for debt or liquid funds.
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Investors who are long-term thinkers and risk-takers should try this method of investment.
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This is a stress-free investment option, as you don't need to worry about remembering dates.
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As your full amount is invested upfront, lumpsum investments work well in rising markets.
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Lump sum investments provide the potential for higher profits, but they also carry risk. They're great for long-term investors who are fine with market volatility and have a windfall to invest. Otherwise, SIPs may be a better choice.
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If you make a lump sum investment of Rs 11,00,000 in mutual funds, then you will be able to accumulate more than Rs 10,00,00,000 in 40 years.
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Invested amount: Rs 10,00,000 Investment period: 40 years Estimated returns: 10,12,56,067 Total value: 10,23,56,067
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The above calculations are based on the expected returns of 12 per cent per annum.
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Yes, investors can make additional lump sum deposits in mutual funds when they already have an ongoing SIP.
Investing in mutual funds is subject to market risks. Consult your advisor before making any investment.