Investing in this can be started from Rs 500
One can also take advantage of tax saving by investing in equity linked saving scheme
Mutual fund is very popular in terms of investment. Because it gives good returns and the risk is less as compared to stock market. In such a situation, if you are also planning to invest in mutual funds, then it is very important to know the mutual fund before that. We are telling you about mutual funds so that you can invest in it properly.
What is a mutual fund?
Mutual fund companies raise money from investors. They invest this money in assets such as stock markets, bonds and government securities. In return, mutual funds also charge fees from investors. There are several different mutual fund houses in the country which appoint fund managers to invest. For those who do not know much about investing in the stock market, mutual funds are a good investment option.
What are the types of mutual funds?
Equity Mutual Fund
These schemes invest investors’ money directly into shares. In the short term, these schemes can be risky, but in the long term it is considered to give you a good return. Your return from investing in such a scheme depends on how the stock performs. Investors whose financial goal is to be completed after 10 years can invest in such a mutual fund scheme.
Debt Mutual Fund
These mutual fund schemes invest in debt securities. Investors can invest in them to meet short-term financial goals. It is okay to invest in them for a period of less than 5 years. These mutual fund schemes are less risky compared to stocks and offer better returns than bank fixed deposits.
Hybrid Mutual Fund Scheme
These mutual fund schemes invest in both equity and debt. While choosing these schemes, it is important for the investors to take care of their risk appetite. The hybrid mutual fund scheme is divided into six categories.
Solution Oriented Mutual Fund Scheme
Solution oriented mutual fund schemes are made according to a specific goal or solution. These may have goals such as retirement schemes or child education. In these schemes you are required to invest for at least 5 years. You can get good returns by investing in it.
How to invest?
There are 4 ways to invest in a mutual fund. One can invest in it from online to full form. Money invested in mutual funds is invested in the stock market. Therefore many people feel that a demat account is necessary for this, although it is not so. Investments in mutual funds can also be made without a DEMAT account.
The first way is
to invest in it through an agent. If there is a problem in finding the agent, then you can talk to the company in which you want to invest, with the toll free number from the website of the company. The company will contact the agents in your area. Then with the help of this agent you can invest.
The second way
can also be invested through a broker or a website selling mutual funds. Many people invest in the stock market, they can also invest in mutual funds through their broker account. In addition, there are more than a dozen websites in the country that sell mutual funds. People can buy mutual funds after registering themselves on these websites. If needed, this website also sends its agent to the investor for help.
The third way
is investing in a direct plan. After the SEBI order, all mutual fund companies offer the option of a direct plan in all their schemes. Investments in these are entirely online. You go to the website of the mutual fund company and choose the scheme directly and complete the process of investing in some steps. Here payment has to be done online.
Fourth way,
now with the help of PayTm Money App, you can invest in any mutual fund. With the help of Paytm Money app, you can easily check your portfolio along with making investments. For this you will not have to pay any commission or fee separately.
How much money can one invest?
The minimum investment amount may vary depending on the fund you invest. However, you will get a minimum of Rs 500 Can invest. You can increase it according to your ability.
Who should invest in it?
If you want to invest in the stock market but you do not know it, then you can invest in mutual funds. Because under this your investment is managed by the fund manager, who has a good understanding of the market. In such a situation, the probability of loss is very less. At the same time, your portfolio gets diversified through mutual funds. Because here, instead of just one share, money is invested in different shares or asset class. If there is a risk in one, then it is covered in the other.
You can get the benefit of tax rebate from this
Equity Linked Saving Scheme i.e. ELSS is a tax saving mutual fund scheme, if you invest in this scheme of mutual fund, avail tax exemption on investment up to Rs 1.5 lakh under Section 80C of Income Tax Law Can. The lock-in period on ELSS existing in the market is at least 3 years. In the last 10 years, ELSS Mutual Fund category has given a return of about 8.46%.
These mutual funds have given good returns in last 10 years
| Fund house | Category | Annual Return (%) |
| Mirae Asset (Emerging Bluechip Fund) | Lodges & Midcap Funds | 18.15 |
| Canara Robeco (Emerging Equities Fund) | – | 15.52 |
| SBI Focused Equity Fund | Multicap | 13.80 |
| Invesco India | Multicap | 12.52 |
| Mirae asset | Largecap fund | 12.49 |
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