Benefits of Mutual Fund – Hello Guys, welcome to my blog, today I will tell you what is Mutual Funds and what are the benefits of investing in it, so if you want complete information about Mutual Fund and want to know that Investing in Mutual Fund Right or Wrong, please read this article in its entirety so that you get complete information about Mutual Fund.
What is Mutual Fund – A mutual fund is a type of group investment in which a lot of investors invest money together. The fund manager is overseen by this fund and calculates the loss profit. The money deposited is invested in other projects, equity, money market, bonds, and other securities. Every investor in a mutual fund owns units that represent a part of the fund’s value. All investors are divided equally if there is loss or gain. Their money increases when there is a profit while their money decreases when there is a loss.
Small investors can invest up to Rs 100 per month in mutual funds. This money is automatically deducted from their bank account. To make this plan, they have to get a SIP (Systematic Investment Plan) Systematic Investment Plan.
Benefits of Mutual Fund
Certain mutual funds such as closed-ended ones and ELSS are a lock-in period during which individuals cannot redeem their money. In other words, their money gets blocked in such investments. Therefore, individuals should be careful considering lock-in periods, otherwise, they will not be able to use the funds when needed. However, the bright side of the ELSS can claim a tax deduction of up to Rs 1,50,000 under the Individuals Section 80C Tax Act, 1961.
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Ease of Use
Investment in mutual funds can be done through various channels such as mutual fund distributors, fund houses, brokers and various other agencies. However, going through distributors is convenient as individuals can find many schemes offered by different fund houses under one roof.
Furthermore, these brokers provide an online mode of investment through which individuals can invest from anywhere and at any time as per their convenience. In addition, they do not charge customers any fee. After understanding the various pros of mutual funds, let us now take a look at some cons of mutual funds. These signs are listed as follows.
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Mutual fund schemes are managed by qualified professional experts. The credibility of these fund managers is verified before submission. These people know where to invest money so that they can earn maximum profit. In addition, these mutual funds are well regulated. They are required to publish their reports at regular intervals so that investors can understand how the mutual fund scheme is performing. Also, they are supervised by various regulatory authorities.
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