You all must have heard about Mutual Funds. Currently, this is a great way to invest, in this, you can invest from small amount to large amount.
If you also want to invest money in mutual funds, then first of all you should have complete information about it. In today’s article, we will provide you with basic mutual fund information which will prove to be very helpful for you.
What is Mutual Fund?
Mutual Fund is a fund where the money of many investors is collected and invested separately. In simple words, here many people invest their money, which the company uses in its business and gives maximum profit to the investors.
When was the foundation of the mutual fund industry laid?
The Unit Trust of India (UTI) was formed by the Government of India in the year 1963. Its objective was to bring the mutual fund industry to the masses. It was initially under the Reserve Bank of India, but in 1978 all its rights were given to IDBI Bank.
Who looks after the mutual fund?
The Fund Manager does the work of looking after all the activities of the Mutual Fund. Its job is to properly account for the money coming into the mutual fund and give maximum profits to the investors by putting the money in the right place.
How does Mutual Fund work?
A huge amount is not required to invest in Mutual Fund, you can also invest Rs 500 per month. By collecting these small amounts, the company makes a large amount and then the stocks of different and big companies are bought. Experts of these companies know very well when which stock will rise and when will fall.
It invests the deposited money in the stock of different companies so that if there is a loss from one company, the money can be recovered from the profit of the other company. The important thing here is that if you invest for a long time, then you will get more profit.
What is NAV?
NAV stands for Net Value Asset. Shares are bought or sold on demand of NAV only. It is the price of one unit of the Mutual Fund and shows the performance of the scheme of the Mutual Fund. Whenever a new unit is created by the mutual fund company so that the investment amount can be increased.
Types of Mutual Funds
Mutual Fund is not just one type, it also has many types which are as follows:
Equity Mutual Fund
In Equity Mutual Fund, investors deposit money for a long time, only then do you get the best returns in it. Investing in it for a short period of time can be a loss-making deal.
Debt Mutual Fund
You can invest money in Debt Mutual Fund for a period of less than 5 years. In this, the bank gives you better returns on Fixed Deposit.
Hybrid Mutual Fund
In Hybrid Mutual Fund, you get the benefit of both Equity Mutual Fund and Debt Mutual Fund, but special care should be taken while investing in it.
Solution Oriented Scheme
This is the best scheme for the future of you and your family. In this, you have to deposit money for at least 5 years so that you can live a good life after your children’s education, marriage and your retirement i.e. the money you invest in it has to be deposited for a long time.
Who Regulates Mutual Funds?
The work of regulating Mutual Funds is done by SEBI (Securities Exchange Board of India). It controls the fund house so that investors are not cheated.
What are the charges of Mutual Fund House?
Before investing in a mutual fund, you should be aware of its expenses and fees. The mutual fund house charges Exchange Ratio Charges from you for providing its services. It ranges from 0.25% to 3%.
How to Invest in Mutual Funds?
You can invest in Mutual Fund in both offline or online ways, so let’s know about them:
Offline: You can directly go to the mutual fund company and get the form from there. This will give you the benefit of direct investment, but if you fill the mutual fund investment form through a distributor, then you will have to give some percentage to them.
Online: Here you can fill the form yourself by visiting the website of the mutual fund company. For this, if your KYC is done, then you should keep the necessary documents like PAN card, bank passbook and Aadhar card etc. with you.
Groww App (Android): Sign Up Now
Through this link, you will have to first sign up in the Groww App if you do not already have an account. At the same time, once you have created an account, then you can easily invest money in Mutual Fund through this app.
Things to keep in mind while investing in Mutual Funds
While investing money in mutual funds, it is necessary to keep some things in mind, only then you can get profits from here:
- Before investing in mutual funds, consult with an experienced person so that you can get all the information about mutual funds
- First of all, choose a company that has a good past record and investors have made profits from there.
- Select the category which gives you the best Net Value Asset.
What is the difference between a mutual fund and the share market?
Profits are obtained by investing money in the share market, mutual funds also work in the same way, the only difference is that there are more chances of risk in the stock market, but in mutual funds, you can keep money safe and earn profits. Also, you are not charged tax.
Whose job is to regulate mutual funds?
The task of regulating mutual funds rests with the Securities Exchange Board of India.
What is the percentage charges that Mutual Fund House charges?
Mutual Fund House charges ranging from 0.25% to 3%.
How much money can I start by investing in mutual funds?
One can start by investing at least Rs 500 per month in mutual funds.
What did you learn today?
I sincerely hope that I have given you complete information about the basic information of mutual funds. And I hope you people have understood about investing in Mutual Funds.
I request all of you readers that you also share this information in your neighbourhood, relatives, your friends so that there will be awareness among us and everyone will benefit a lot from it. I need your cooperation so that I can pass on more information to you guys.
It has always been my endeavour that I should always help my readers or readers from all sides, if you people have any doubts, then you can feel free to ask me. I will definitely try to solve those doubts.
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