Friends, in today’s information, we are going to talk about how mutual funds work and how to invest in mutual funds. Everyone wants that he has a good investment or from his savings, he can invest in a good place and get good returns. So that’s why some people keep their money in the bank and get interest from there.
Some people get their money fixed deposits, either some people invest in gold or friends in the stock market, there are some people who are confused about where to invest their money.
Mutual fund is a very good option for those people in which There is no need to open any demat account to invest.
Friends, there is a little risk in Mutual Funds, but you can invest 500 or 1000 rupees a month in SIP in mutual funds, and there is no much risk in it and you can get 10 to 20 percent growth annually. Let us now talk about what is a mutual fund, how it works and how to invest in natural funds with SIP plans.
First of all let me tell you as the name suggests. Mutual Fund i.e. mutual fund means that some people together give money to a fund house and that fund house gives the amount to 1 highly qualified manager. To invest that money in the market and when those fund managers invest the fund in the market. And when his return comes and there is profit, then 2 or 2.5% of that fee is kept by the fund manager and the entire amount is transferred to you.
What is Mutual Fund?
Those who do not have knowledge about share market. They should invest in mutual funds because by investing in mutual funds, your money remains with a highly professional people who invest this fund in the stock market on the basis of their analysis knowledge and get good returns from them. also get benefit.
Mutual Funds are a kind of lion and indirect investment in the brand. Mutual fund investments are tax institutions or trusts that issue their units like shares that the buyer is investing in. Professional managers invest in various types of shares and other securities on the basis of their knowledge and experience, understanding and analysis of the amount of investment in Mutual Funds.
What Happens in Mutual Funds?
The advantage of mutual fund investing is that the professional fund managers of the mutual fund invest all the pooled money in the best way based on their knowledge and in return they charge some fees. And on profit, after deducting your charge, give you full money.
Mutual funds are beneficial for investing in investments, those who do not have much knowledge of the stock market or do not have so little time to keep complete information before investing in shares, so they are investing in Mutual Funds and Mutual funds further invest in the stock market and other securities investments according to these efficiency.
Any dividend received by the mutual fund. Those investments are distributed on the basis of the Universe they have purchased.
Mutual Fund Benefits
Mutual Fund has many advantages, that is why it is very popular, the first advantage is.
- Professional Management Facility- Friends, when you invest in a mutual fund, some amount from your investment is deducted in the form of expressive sage which is 1 to 2% which is very less, thus the need of professional management in very less cost. receive services. The reason for this low cost of Mutual Fund is that many people together invest in one fund, so that the cost of managing that fund is divided among all the people, this is another advantage.
- Low capital saving investment option- If you want to invest directly in the stock market then you will need more capital but if you can invest in mutual funds with very little money. The biggest advantage of Mutual Fund is that you can start SIP with only 500 or 1000 rupees in it, in this you will not have to wait to invest that when your income is more then you will invest.
- Good returns and power of compounding are seen in mutual funds.
- Mutual Fund saves time, if you invest money in the stock market, then you have to get complete information about the stock in it and have to see it again and again. But once you invest in Michelle Fund, you do not have to spend any time for it.
- Safe Investment Mutual Fund and stock market are controlled by SEBI like RBI is the controller of banks. In the same way, it is from here that all the Mutual Funds are registered under SEBI, SEBI keeps tight control over them and ensures compliance of the rules.
- Ease of withdrawing money Many times it happens that we do it but due to some reason we need money and need to withdraw the invested money but there are many investment plans due to which we can not return our money. You can withdraw but it is not so in this case, the day you request the money comes in your account within 2 to 4 days.
Mutual Fund Risk Factor
Friends, now let’s talk about the loss of Mutual Fund
- Uncertainty of returns – There are many investment plans that have a fixed interest rate such as PPM Fixed Deposit, Post Office Savings etc. But the returns of Mutual Funds are always up and down due to their being linked to the stock market and always remain high-risk especially But if you are investing in mutual funds in the short term, then you should invest for the long term only.
- Cost of Mutual Funds- Mutual Funds have expense ratio in the post group which is very less but it makes a lot of difference in the long run that’s why anytime while making any investment, its expense ratio and expenses should be correctly understood. Get information from
- Lock-in Period Although most of the Mutual Funds do not have any lock-in period, but it is closed-ended and has a locking period, so choose the right mutual fund as per your requirement.
- Maturity tax on mutual fund returns is tax free, but it is not so in the case of mutual funds, you will have to pay short term capital gains if sold within 1 year and short term capital gains tax if sold after 1 year.
How to invest money in Mutual Fund
Investing in Mutual Funds Made Easy Now you can invest in Mutual Funds by doing one time KYC online.
- To invest in Mutual Fund funds, you can do it through any bank.
- You can invest in mutual funds by completing eYC directly by visiting the website of AMC.
- You can take the help of any broker or agent.
- You can also invest in mutual funds through mobile apps like Groww App, Paytm Money, Mycams, Kuvera app.
Where to invest in mutual funds?
There is a mutual fund company that is an asset manager and you give money to the asset manager in a mutual fund, and many people like you put their money with the asset manager, then that company invests all the money in different places.
They have appointed their experts, who invest in different places based on their analysis and the return interest they get from all different investments, some percent of the acid manager company keeps the profit and the rest of the money is kept by you guys. gets back.
Highest Returning Mutual Funds
There are three or four types of mutual funds, some are equity funds, some are debt funds and some are balance funds.
- equity fund They are invested in these equity shares and there are high risk ones in which the risk is high but in which the risk is high, there is also a high probability of earning profit, then nothing is available without taking the risk.
- In equity funds, you have more risk, but if you invest in debt funds, then the risk factor is less in it, then there your profit is also less accordingly.
- The third fund is a balance fund, in which some part of your money is invested in equity funds and some money is invested in debt funds so that it balances the profit so that the risk is also less and the profit is also right for you. If you get good then you have a lot of options, you can invest in equity fund or if you want to listen to medium risk in debt fund then you can invest in balance fund.
Important things to know before investing in Mutual Funds
If you are new and you are wondering how to start investing then here you can choose SIP plan and you can do it by investing ₹ 1000 in the beginning and no much knowledge is required in this.
Before investing, you should do a good analysis about the company. Check out the complete history about it. And before investing, you can also ask about that company, what is the goal of that fund in whichever fund you are investing, whether it would be good to invest in it for long term or not. So you can take all this information from your company before investing.
Apart from this, the information that you have to know is that how much is the risk factor in this Mutual Funds in which you are investing and before investing in any fund, you can also check the history of the fund and the past record on it and also the past. How much has the company grown in the month or year, how much profit has been made.