Using the lumpsum calculator for a bonus parked for three years
A bonus that has to be spent in three years is not a retirement SIP. The lumpsum calculator compounds one amount, once a year, at a rate you type. The 7% and the 10% below are both assumptions. Neither is the rate on a deposit card, and neither is a forecast of a fund.
Last updated: · 4 min read
₹3 lakh after three years
Bar chart of ₹3 lakh left in cash, about ₹3.68 lakh at an assumed 7%, and ₹3.99 lakh at an assumed 10%.
- Left as cash₹3,00,000
- Assumed 7%₹3,67,513
- Assumed 10%₹3,99,300
Put the spend date in before the rate
Three years is the whole plan. If the bonus is for a house token, a parent's treatment, or a course that starts in 2029, the money has to be there in that year. Type 3 in the lumpsum calculator, not 15, and do not borrow a 12% equity story from a SIP guide to make the pot look larger.
₹3,00,000 at 7% for three years is ₹3,00,000 × 1.07 × 1.07 × 1.07, which is ₹3,67,513. At 10% the same sum is ₹3,99,300. The calculator does that multiplication. It does not know what the bonus was for.
A dull rate is a choice, not a product
Seven percent is a number you can type. It is not this site's FD rate, and it is not the PPF rate. If you park the bonus in a deposit, use the rate the bank offered you, for the tenure you will actually hold. If you put it in a fund, the lumpsum line is still an assumption until the units are sold.
Leaving it in the savings account, for this sketch, earns nothing. The bar stays at ₹3,00,000. That is the honest comparison when you have not picked a place for the money yet. A few thousand of savings-account interest would sit between the cash bar and the 7% bar. This page does not invent that rate.
- Cash, no growth in this sketch: ₹3,00,000.
- Assumed 7% for 3 years: ₹3,67,513.
- Assumed 10% for 3 years: ₹3,99,300.
The calculator does not take tax off
Interest on a deposit is taxable for a resident. A fund has its own holding-period rules, and this page does not apply them to a three-year bonus. The ₹3,67,513 and the ₹3,99,300 are before tax. If you know the tax, subtract it yourself. Do not treat the calculator's last line as the amount you can transfer on the day you need it.
A bonus that is salary is already in your income for the year it was paid. Parking it afterwards does not make the bonus itself tax-free. The lumpsum screen is only about what the parked rupees do next.
What to type, and what to leave out
Type the amount you can lock, not the gross bonus. A tax payment, a trip you already promised, and the emergency fund come off first. If ₹1,00,000 of a ₹4,00,000 bonus has to stay liquid, the lumpsum is ₹3,00,000, which is this example.
Run 7% and then 10% as two scenarios. The difference, ₹31,787 here, is what a higher assumption is claiming. If you would not hold the risk that goes with the higher number for a dated spend, stay with the duller one.
Worked example: ₹3 lakh, spent in year three
Both rates are assumptions so the annual compounding is easy to check. Replace them with the rate you were offered, or with a rate you will still accept.
| Item | Figure |
|---|---|
| Bonus parked | ₹3,00,000 |
| Tenure | 3 years |
| Left as cash | ₹3,00,000 |
| At an assumed 7% | ₹3,67,513 |
| At an assumed 10% | ₹3,99,300 |
| Gap between the two rates | ₹31,787 |
Open the lumpsum calculator, enter ₹3,00,000, 3 years, and 7%. You should see about ₹3,67,513. Change only the rate to 10% and the line becomes ₹3,99,300. Then decide whether the spend date can live with the higher assumption.
Sources
Results from FinanceChacha are estimates for planning, not financial or tax advice. Read the disclaimer.
Try the calculator
Open the calculator this guide refers to and run your own numbers.