Invest in Mutual Funds !

Mutual fund companies hire professionally skilled managers to manage the money pooled in a mutual fund scheme. This ensures that the investor's money is being managed by an expert at all times and that they do not have to fret over it. It is the fund manager's job to decide which company shares, bonds or stocks to invest the pooled money into or to hold the capital.

A mutual fund is an option for every kind of investor. Investors with specific earnings every month can start investing with as low as just Rs 500/- per month and investors who have a big chunk of money with them because of some property selling, or ancestral inheritance, can invest a lump sum and seek benefits as well as high returns.

As mentioned above, every investor can seek benefits. SIP refers to Systematic Investment Plan, and this is for the investors who do not wish to make a one-time investment. Through the schemes in SIP, an investor can make small and manageable investments as installments every month. You can start your SIP with IIFL today. Just keep your Aadhaar Card and Rs 500/- ready!

Every mutual fund has a different lock-in period. This could be one must or none at all. ELSS is one tax-friendly mutual fund scheme that has the shortest lock-in period of 3 years for good returns. However, this must be noted that holding period of your investment is directly proportional to the return you receive. The longer you stay invest (after the mandatory lock-in period), the higher will be your returns. Also, an investor can withdraw at any time when he or she has invested in an open-ended mutual fund.

Switching funds is usually done by fund managers or by an investor who has attained enough knowledge to make the switch. This is done to keep up with the market conditions. This information is usually provided by the asset manager of the fund who analyses and keeps an eye on the market conditions, closely. This ensures that the investment does not suffer during the market's volatility.

Most of the mutual funds have no time foundations unless the scheme specifies. For instance, ELSS is a tax saving scheme which has a lock-in period of 3 years minimum. Other investment schemes have flexible tenure depending on your financial goals.

Out of the many benefits, one of the most prominent is the fact that mutual funds are completely liquid. You can withdraw your invested money any time you want.

Mutual funds are the investment method that ensures tax-saving at the most. Many of the mutual fund schemes have proven to be very tax-efficient and have generated high returns in comparison to any other traditional form of investment. View recommendations by IIFL's expert team for tax-saving funds here.

In order to manage risk, mutual funds invest in various assets, shares, bonds, and different company sizes. So, this way when one underperforms, the other gains to compensate for the loss. The recommended number of entities to invest in is 5 as then it might become complicated to monitor the funds. The investment made in various schemes can also be goal-based, according to the kind of results that an investor expects. For instance, one can like fixed income after retirement or want to save tax, or just wish to save for a new car.