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Business News/ Money / Personal Finance/  Why do mutual funds deserve your well-earned money?
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Why do mutual funds deserve your well-earned money?

Mutual funds have been quite evident in the financial market and have an easy-going process and with which adequate amounts of research can result in good investment choices which can result in achieving financial goals of the investor.

Mutual funds provide exposure to various shares and fixed instruments.  (MINT_PRINT)Premium
Mutual funds provide exposure to various shares and fixed instruments.  (MINT_PRINT)

Mutual Funds is a type of scheme which collects funds from a pool of investors and then invests it in different financial securities like stocks, bonds, etc. The schemes are selected keeping in mind the objective of the scheme.

Mutual Funds have caught up a lot of attention over the recent years and therefore it is found out that a lot of people have been investing in the same in order to gain returns and achieve their financial goals. Let us look at the reasons as to why people should invest their hard-earned money in mutual funds:

Easy to start

The process of initiating to invest in mutual funds is pretty easy and hassle-free as everything is paperless and the investor only has to complete a basic requirement of KYC just like asset classes like equity, debt and commodity and you are good to go. Investors can easily have an automated debit option for mutual fund investment and SIPs, which adds ease to investment.

Helps to diversify your portfolio

Mutual funds provide exposure to various shares and fixed instruments. You have the option to spread your money in different baskets, which will help you to diversify your portfolio. There are over 2,000 currently active schemes to choose from! The schemes can be chosen according to the investor's risk appetite, investment horizons, and personal financial goals.

How many mutual funds are too many?
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How many mutual funds are too many?

Minimising taxes

You can actually minimise your taxable income by investing in Equity Linked Saving Scheme (ELSS) funds, it helps to attain tax benefits under section 80c of the Income Tax Act, which allows a tax exemption of upto Rs 1.50 lakh. To add on, investing in ELSS funds can start by an amount as low as Rs. 500 and it comes with a lock-in period of a minimum of 3 years.

Accessible for everyone

You can start investing in mutual funds with an amount as low as Rs. 100. This option of mutual funds helps people with low income gain easy returns, as they can also systematically plan their investments in small amounts.

Backed by experts

Experienced fund managers manage mutual funds, they know how to make investment decisions under the proper analysis of crucial situations and risk. Fund managers help to maximise returns by proper market study as most people don’t have the time to invest in proper research work, which adversely affects their portfolio.

It can be concluded that mutual funds are a great source for investment and investors can definitely invest their well-earned money as benefit from the same is quite evident and can result in good return in the long-term.

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Published: 03 Mar 2022, 10:15 PM IST
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