The answer to this question depends on the stock market conditions. During upward trends, the lump sum mode of mutual fund investment tends to give relatively higher returns whereas during falling markets, investments made via a SIP generally provides better returns than a lump sum investment.
In a bid to attract more investors, various domestic mutual funds have slashed the minimum lump sum investment amount in a scheme to ₹100. Earlier, most MF schemes required investors to put in at least ₹500-₹5,000 as lump sum.
Both equity funds and debt funds can be technically withdrawn as soon as the fund is available for daily sale and repurchase. Forget about 1 month; you are also permitted to withdraw within a day of your investment reflecting in your mutual fund statement.
SIP can be considered as a better route to achieve the financial plan and investment goals. Mutual funds provide an investor with an option either to reinvest the earnings or returns. If instead of withdrawing an investor reinvests in the same plan he can enjoy the benefits of power of compounding.
Any day is the best time to invest in mutual funds. Remember, you need to invest as per your financial goals and risk tolerance.
Top 10 Equity Mutual Funds
| Fund Name | Category | 1Y Returns |
|---|
| ICICI Prudential Technology Fund | Equity | 66.7% |
| Nippon India Pharma Fund | Equity | 68.9% |
| Axis Bluechip Fund | Equity | 18.6% |
| Axis Multicap Fund | Equity | 18.4% |
If you are investing for long-term financial goals that are at least seven to 10 years away, you may consider investing in equity mutual funds. That is, provided you are willing to take risk.
| Scheme name | Percentage (%) |
|---|
| Axis Bluechip Fund - G | 25 |
| ICICI Prudential Bluechip Fund - G | 15 |
| Motilal Oswal Multicap 35 Fund - G | 10 |
| Aditya Birla Sun Life Regular Savings Fund -G | 50 |
Definition: A lump sum amount is defined as a single complete sum of money. A lump sum investment is of the entire amount at one go. For example, if an investor is willing to invest the entire amount available with him in a mutual fund, it will refer to as lump sum mutual fund investment.
You can put a lump sum of money in a savings account
- A fixed rate savings account or fixed rate bond. If you're looking to put away your money for a set period of time, a fixed rate savings account or fixed rate bond could be best for you.
- An easy access savings account.
- A cash ISA.
For high-risk appetite investors, they can look at investments in equity funds, whereas low-risk appetite investors could consider Systematic Transfer Plans (STP). Split your lump sum between 2-3 liquid funds, and then move some amount every month into your preferred equity, debt, or balanced funds.
Lump sum, where the life insurance company pays the total amount of the benefit in one single payment at the death of the insured.
Conclusion. It is crucial to implement 50:30:20 rule in your financial plan. One should invest at least 20% of their salary in mutual funds and can later increase whenever possible.
A Vanguard study actually showed that investing a lump sum outperforms dollar-cost averaging 64% of the time over six months and 92% of the time over 36-months, assuming a 60%/40% portfolio of stocks and bonds.
You need to input the desired lump sum amount, number of years you have in hand to achieve the same and the rate of return expected on the investment. It displays the total amount invested in the given period, the monthly amount needed to be invested and the earnings on the investment.
??SBI Small Cap Fund had stopped accepting lumpsum investments earlier from October 2015 to March 2020. SBI Small Cap Fund will not accept lumpsum investments after September 7. The fund house will only accept investments through SIPs of up to Rs 5,000 per individual.
If you've just received a large bit of cash from an inheritance, tax refund, or bonus, investing in a lump sum is a good way to put it to work. Provided that you already have a diversified portfolio and healthy retirement savings, this can be a good opportunity to invest in individual stocks you've had your eye on.
Best SIP Plans for 5 Years in Equity Funds
- Axis Bluechip Fund Monthly SIP Plan. This is an open-ended equity scheme with a track record of outperformance.
- ICICI Prudential Blue chip Fund.
- SBI Blue chip Fund.
- Mirae Asset Large Cap Fund.
- SBI Multicap Fund.
- SBI Bluechip Fund.
- Aditya Birla Sun Life Tax Relief 96.
- SBI Small Cap Fund.
- ICICI Prudential Bluechip Fund.
- Canara Robeco Bluechip Equity Fund.
- Kotak Emerging Equity Fund.
- Mirae Asset Tax Saver Fund.
- Tata India Tax Savings Fund.
In a nutshell, mutual funds are safe. Investors should not be worried about short-term fluctuations in the returns while investing in them. You should choose the right mutual fund, which is sync with your investment goal and invest with a long-term horizon.
Good Average Annual Return for a Mutual FundFor stock mutual funds, a “good” long-term return (annualized, for 10 years or more) is 8%-10%. For bond mutual funds, a good long-term return would be 4%-5%.
Mutual Fund investments can be made in two different ways – one is through SIP and the other is one-time investment. Systematic Investment Plan or SIP is a regular investment of small amounts for the extended time period. Whereas, in one-time investment, the investor parks a lump sum amount for the specific time.
NPS investments mature when the investor turns 60. If the corpus is less than Rs 2 lakh, the entire sum can be withdrawn. If it is more, the subscriber must put at least 40 per cent of the corpus into an annuity to get a monthly pension. The investor can choose any annuity option as well as the annuity provider.
Yes, you most certainly can. Mutual fund houses allow you to invest in mutual fund schemes whichever way you like. So, if you have an ongoing SIP with a mutual fund house in say scheme A, you can definitely add more amount as lump sum in the same scheme. A can invest lump sum amount in the same mutual fund scheme.
