The financial markets have become a lucrative investment avenue for small and big investors alike. They give inflation adjusted returns and help in capital maximization. One such way of investing in the financial markets is mutual funds.

Mutual funds are popular investment tools for investors willing to accept risks.

If you want to –

Save affordably for your financial goals

Get professional fund management

Invest in market-linked securities

Plan taxes on your investments efficiently

Diversify your investments

Mutual funds are right for you.

By investing in mutual funds, you get the following benefits –

  • A diversified investment portfolio which invests in the securities of the best companies and entities
  • Experienced fund management by professionals so that their investments give them the best possible returns at the least possible risk
  • An avenue for affordable investments which can be done with as little as INR 500. Moreover, you can choose to invest in mutual funds in one lump sum or through regular instalments b choosing Systematic Investment Plans (SIPs)
  • Market-linked and inflation adjusted returns which are in tandem with the economy’s growth rate
  • Tax benefits if you choose to invest in Equity Linked Saving Schemes (ELSS) which are equity oriented mutual fund schemes. These schemes allow you tax benefit under Section 80C on the investment that you do. You can claim a deduction under this section on a maximum investment of INR 1.5 lakhs which helps in bringing down your tax liability.
  • Easy liquidity as you can redeem or withdraw your mutual fund investments whenever you like to meet your financial needs

Moreover, there are different types of mutual fund schemes
based on their –

Investment Objective

Return Potential

Risk Profile

The most common types of mutual fund schemes are –

Each type of scheme is further subdivided into different categories. For instance, equity funds are divided into the following –

  • Large Cap Funds
  • Small Cap Funds
  • Mid Cap Funds
  • Equity Linked Saving Schemes, etc.

Similarly, debt funds are divided into the following types –

  • Short Term Debt Funds
  • Liquid Funds
  • Gilt Funds
  • Long term debt funds, etc.

Mutual funds are regulated by the Securities and Exchange Board of India (SEBI) and are, therefore, governed by the rules, regulations and guidelines issued by SEBI. All mutual fund companies have to abide by SEBI’s laws making them safe to handle your investments. Returns offered by mutual fund schemes are not guaranteed as they depend on the performance of the securities into which the scheme has invested.

Thus, if you are looking at a good return potential and are willing to take investment risks, you can invest in mutual funds for creating a financial portfolio for your goals.