Mutual funds are becoming a new way of investment in today’s era. Along with increasing investment, many types of questions remain in the investor’s mind. In such a way, the mutual fund is special, how tax saving is available, how companies invest in it, we are telling the whole details through Adil Shetty, CEO of Bank Market.com.
When it comes to saving money in a mutual fund, the first thing to do is the risk. If you invest your entire money in a company and for some reason, the company gets drowned, all your money will also be drowned. In such a case, the biggest benefit of mutual funds is that here your money is invested in different companies. Like your money is invested in different stocks and bonds. The advantage of this is that if any money invested in any company, then the benefit from the rest can cover it.
Despite this, if you believe that mutual funds have a risk, then you can manage risk as per your own risks. Like here are three categories high risk, medium risk, and low risk. In such a situation, if you choose a high-risk option while taking a mutual fund, then the risk will be very high.
But the advantage in this is that if you gain you will get more returns. Similarly, if you choose the medium-term option then you will have to take the risk of medium level, you will get the benefit of return on the medium level only. Apart from this, if you choose a minimum risk option in Low-Level Risk Zone, you will get a return only. In such a case, you can choose your own risk zone in the Mutual Fund.
When you invest in a mutual fund, you have two options. There is an option in that you invest in regular funds and the second is that you invest in a tax saver fund. The difference between these two is that you can start withdrawing money only after a few months of starting a regular fund. While the tax-saving fund has a lock-in period of 3 years. You can not withdraw from this fund before that lock-in period.
Tax-saving mutual funds also get the benefit of income tax exemption on the investment under Section 80C of the Income Tax Act. This means that you can get income tax exemption on investment in such mutual funds.
All mutual fund investors who choose to hold high, medium or low-risk funds. Looking at the returns of money, they choose them. This means that they can either choose a fund that can get good returns in less time. On the other hand, on the other hand, they choose long periods where money can be invested with planning in the long run.
You are young and now you have started a job now. In this case, you do not have a large amount of investment in a mutual fund. During this time, you can choose the Systematic Investment Plan (SIP) option. SIP means nothing else that you are investing in mutual funds like EMIs. SIP gives you the option to invest without a financial pressure in a mutual fund. At the same time, if you have a large amount, you can invest it in a one-time mutual fund.
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