A lump sum investment is a one-time, significant contribution of money into a mutual fund scheme. When timed well, especially during strong market phases, lump sum investments can offer superior returns due to continuous compounding.
Compounding is the process where your investment gains interest, and then that interest also starts earning interest, leading to exponential growth. For example, after 15 years, your initial investment of ₹20,00,000 could grow significantly. With estimated returns of ₹89,47,132, the total value of your investment would be ₹1,09,47,132. This shows how a good chunk of wealth can be built over a decade and a half.
Staying invested for a longer period truly allows your money to grow. If you stay invested for 20 years with the same 12% annual return, your estimated gains would be ₹1,34,34,069, bringing the total value to ₹1,54,34,069. This milestone clearly demonstrates how consistent long-term holding in mutual funds can lead to substantial wealth creation.
To achieve the ambitious goal of a ₹2 crore corpus from your initial ₹20,00,000 investment, extending your investment horizon even further proves crucial. With an average 12% annual return, your investment will need approximately 21 years to reach this significant milestone. At this point, your estimated returns would be a massive ₹1,96,07,697, pushing the total value of your investment past ₹2 crore, reaching ₹2,16,07,697. This highlights the immense impact of patience and long-term vision in mutual fund investing.
Read more: Cash Is King? Small Vendors Now Prefer Cash Over UPI
Lump sum mutual fund investments, powered by disciplined investing and the magic of compounding, offer a clear path to massive financial growth. As demonstrated, a ₹20,00,000 investment can indeed transform into a ₹2 crore corpus by staying invested for approximately 21 years with a consistent 12% annual return. Time truly is your greatest asset in wealth creation through mutual funds.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jul 16, 2025, 4:02 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
