One Time Investment Plan

A one-time investment plan involves investing a lump sum amount into a specific scheme at once for a set period.
One time Investment Plan
3 min
22-June-2024

A one-time investment plan is a type of investment where a lump sum amount is invested in one go in a particular scheme for a specific duration.

Are you looking to maximise your financial potential by investing a significant sum all at once? If so, the one-time investment plan offers a variety of choices, enabling you to deploy your capital in a single transaction rather than spreading it out through regular payments.

This article will walk you through the different one-time investment plan options, their benefits, and the different options available in India to suit your financial goals.

What is a one-time investment plan?

A one-time investment plan allows you to invest a significant lump sum into an investment of your choice, such as mutual funds, stocks, bonds, fixed deposits, or insurance policies, in a single transaction rather than distributing the investment over multiple periods.

When deciding where to invest, consider your financial objectives, risk tolerance, and investment horizon. Whether you're considering stocks for growth or bonds, for stable returns the key is to stick to a consistent strategy; invest your funds in one go and aim for long-term gains.

This approach is particularly advantageous for individuals with excess funds, who have a larger risk appetite and are keen on maximising their returns over a longer horizon.

How does a one-time investment plan work?

In a one-time investment plan, you pool all your money into an upfront investment instead of making periodic payments and spreading it out over time.

How it operates:

  • Choosing an investment option: You have the flexibility to pick from choices such as mutual funds, stocks, or bonds. Each option comes with risks and potential returns to suit different financial goals and risk preferences.
  • Making a lump sum investment: You invest a sum of money at once into the selected financial product in a single transaction. You can use a lump sum calculator here to plan your investment better.
  • Potential for growth through compounding: The invested amount has the opportunity to grow over time due to compounding, where your investment returns generate returns. This can significantly boost the value of your investment.

For instance, you make a one-time investment of Rs. 500,000 in a mutual fund that yields an average 9% annual return rate. Then in five years, your initial investment could grow to around Rs. 769,312, thanks to the effects of compounding – reinvesting earnings to earn more. ​

Features of one-time investment plan

The One Time Investment Plan (OTIP) is a popular investment option in India that allows investors to invest a lump sum amount in a single transaction. Here are some key features of OTIP:

  • Lump sum investment: OTIP involves investing a single amount in a single transaction, which can be a one-time investment or a lump sum payment.
  • Flexibility: Investors can choose from a variety of investment options, including stocks, bonds, mutual funds, and more.
  • Tax benefits: OTIP investments are eligible for tax benefits under Section 80C of the Income Tax Act, 1961, subject to certain conditions.
  • Risk management: OTIP investments can be managed by professional fund managers, reducing the risk associated with individual stock investments.
  • Diversification: OTIP investments can be diversified across various asset classes, reducing the risk associated with individual investments.
  • Convenience: OTIP investments can be made through various channels, including online platforms, mobile apps, and physical branches.
  • Transparency: OTIP investments provide detailed information about the investment, including the investment amount, interest rate, and maturity period.

Benefits of one-time investment plans

  • Gives immediate market exposure: Contrary to SIPs, one-time investment plans require you to make a lump sum deposit at the beginning. This gives your capital longer exposure to take better advantage of market upswings.
  • Promotes simplified management: A one-time management plan does not require any ongoing contributions. This investment approach also eliminates the need to regularly time the market, thus reducing the stress and complexity associated with frequent decision-making.
  • Increases cost-effectiveness: Making periodic contributions over months, years, or decades is bound to attract more transactional fees. In a one-time investment plan, the fees are more economical owing to fewer transactions.
  • The power of compounding: When you invest a substantial amount in one go you instantly tap into market opportunities allowing your investment to benefit from compounding. This means your returns have the potential to grow exponentially over time surpassing the growth potential of systematic plans that involve smaller, periodic contributions.

One-time investment options in India

Here are the Top 10 one-time investment plan options in India that cater to a wide range of risk profiles, return potential, and time frames

Investment options Expected returns Risk level
Direct Equity High High
Mutual Funds Moderate to high Moderate
Fixed Deposits Low to moderate Low
Bonds Low to moderate Low
National Savings Certificates Moderate Low
Real Estate High Variable
Gold Moderate Moderate
ULIPs High High
Public Provident Fund (PPF) Moderate Low
Senior Citizens' Saving Scheme Moderate Low

 

Who needs a one-time investment plan?

A one-time investment plan in a mutual fund or any other asset class is ideal for the following people.

Investor profile Suitability reason
Lump-sum Recipients Immediate investment of a large sum, such as an inheritance or bonus
Risk Tolerant Investors Those comfortable with potentially high returns at higher risks
Long-term Financial Planners Individuals planning for future needs like retirement or education
Seasoned Investors Those with the experience to capitalise on market timing


Factors affecting the decision of a one-time investment plan

When considering a one-time investment for high returns various aspects come into play:

  • Financial security: Having enough stability to handle any fluctuations in the market
  • Investment timeframe: Longer periods usually align better with one-time investments
  • Risk preference: Being comfortable with taking risks is conducive to a one-time investment plan
  • Market situation: Timing entry into the market correctly can boost investment returns

Disadvantages of one-time investment plans

Despite the numerous benefits of this investment approach, there are a few drawbacks that investors need to consider:

  • Market timing risk: Poor timing can lead to significant losses
  • Less flexibility: Once invested, reallocating funds can be challenging.
  • High initial requirement: Requires a substantial amount of capital upfront.
  • Potential for higher losses: If a market declines soon after investment, it can lead to significant losses

Conclusion

A one-time investment plan can be a powerful tool for those with the right financial backing and risk appetite. It simplifies investing, potentially accelerates financial growth through compounding, and suits those with a clear, long-term financial trajectory.

However, it’s essential to weigh the potential disadvantages against personal financial circumstances and goals before proceeding.

Whether opting for a one-time investment plan in a mutual fund or initiating a SIP for a new mutual fund scheme, investors can utilise the Bajaj Finserv Mutual Funds Platform to pursue their financial goals confidently.

The convenient and easy-to-use Bajaj Finserv Mutual Funds Platform boasts over 1,000 schemes for easy comparison and selection. making it an excellent resource for both novice and experienced investors.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator
SIP Calculator Lumpsum Calculator Step Up SIP Calculator
Mutual Fund Calculator Brokerage Calculator FD calculator

Frequently asked questions

Which mutual fund is best for 1 time investment?

Here are several excellent options for making a one-time investment:

  1. Single-premium life insurance policies
  2. Individual stocks
  3. Mutual fund schemes
  4. Government or corporate bonds
  5. Real estate properties
  6. Precious metals like gold
  7. Fixed Deposits (FDs)
What is a one time investment in a mutual fund called?
A one-time investment in a mutual fund is known as a lump sum investment. This involves investing a significant amount of money all at once into a specific fund for a designated period.
How to invest 10,000 rupees one-time?
To invest 10,000 rupees as a one-time amount, choose an investment vehicle such as a mutual fund, stock, or fixed deposit, and complete the transaction through a bank or investment platform. Ensure you understand the terms and potential returns before committing your funds.
Is one time SIP good or monthly?
A one-time SIP is suitable for those with a lump sum to invest immediately, while monthly SIPs are better for building investments gradually and spreading out the investment cost over time. The best choice depends on your financial situation and investment goals.
Can I withdraw money from one time SIP?
Yes, you can withdraw money from a one-time SIP in a mutual fund, though it may be subject to exit fees or lock-in periods. Always check the specific fund's terms or consult a financial advisor before withdrawing.
How do you calculate one time investment?
To calculate the future value of a one-time investment, use the compound interest formula: A = P (1 + r/n) ^ nt Where: A: Future value of the investment, P: investment amount, r: Expected rate of return, t: Duration of the investment, and n: Number of compounded interests in a year.
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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. 

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.