A one-time investment of a large amount in a mutual fund, as opposed to periodic SIP instalments.
A lump sum investment involves deploying a large, single amount of capital into a mutual fund at one point in time. It is the simplest form of mutual fund investment and is suited to investors who have surplus cash and a view on market levels.
Instead of investing ₹5,000 every month (SIP), you invest ₹6,00,000 all at once. All ₹6 lakh buys units at the current NAV. The advantage is immediate full market exposure; the risk is that if the market falls right after you invest, your entire principal is affected.
You choose a fund, complete KYC, and transfer the full amount in a single transaction.
Units are allotted at the applicable NAV (usually the same day's NAV if invested before 3 PM).
Your investment grows as NAV rises over time.
For tax purposes, the purchase date of lump-sum units is the date of allotment — relevant for LTCG and STCG calculations.
Corpus: ₹6,00,000 | Assumed 12% CAGR | 5-year horizon Lump Sum (invest all ₹6,00,000 on Day 1): Final value = ₹6,00,000 × (1.12)^5 = ₹10,57,000 SIP (₹10,000/month for 60 months): Final value = ~₹8,17,000 Lump sum wins when deployed early in a rising market. SIP reduces risk during volatile periods via rupee cost averaging. For uncertain markets, deploy lump sum via STP over 6–12 months.