Mutual Funds

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Lumpsum

Lump sum refers to investing a bulk amount at one go. When individuals opt for this method of investing, a considerable sum is tied with a one-time mutual fund investment, thereby known as a lumpsum investment in a mutual fund.

In fact, lump sum investment is a popular way of investing in a mutual fund. Generally, a lump sum investment is well suited for investors with a substantial disposable sum in hand. Moreover, investors with a substantial amount of money opt for this manner of investing.

For instance, you can utilise a major portion of your savings by investing it in mutual funds via a lumpsum method.

Benefits of Lumpsum Investing

Lumpsum investments do not compel investors to commit to future investments. Hence, this can be a preferable investment method for individuals lacking a fixed income.

Contrary to SIPs, lump sum investments do not require investors to invest periodically at fixed time intervals. A one-time, lumpsum payment can, therefore, be a hassle-free and straightforward method of investing in mutual funds.

Since lump sum means a single investment, the minimum amount that most mutual funds require is Rs.5,000. However, after the initial lump sum investment, usually you can make subsequent investments in multiples of Rs.1,000 in the same scheme.