The term "lump sum" denotes a significant amount of money. In the financial context, it implies investing a large sum all at once, rather than spreading it over several payments.

A lump sum investment involves committing the entire available capital in a single transaction. For instance, if an individual decides to allocate all their funds into mutual funds or similar vehicles, this would be categorized as a lump sum investment.

Likewise, a lump sum payment signifies paying the full amount immediately, rather than in parts.