If you’re always worried about investing in Mutual Funds India, then blow that thought away now! Mutual funds are taken care by government approved/aided banks and institutions that try to generate inflation ready returns and ensure tax saving investments Mutual funds for you.
Typically, banks were considered to be far safer than mutual funds, where we previously witnessed severe ups and downs happening quite often. This is no truer for banks and other financial establishments. People have been long habituated to choose investment options that ensure comfortable fixed income to them, in terms of capital protection and regular money.
Bank sponsored FDs and RDs are ancient now to build clear expectations of returns with the individuals. They have always been considered the best investment avenues, but it’s time to bid goodbye to them! Their fixed interest rates are age old and unattractive today.
So, why should one Invest in Mutual Funds?
Mutual Funds is trying to make a place and strike that chord with customers but it’s still steadily slow. Especially with the easy, online functionality, mutual funds are winning some battles in the financial domain today.
In the past, mutual funds had witnessed quick schemes that resulted into fraudulent activities, incurring major financial losses. This is possibly the reason why mutual funds were not as much trusted and marked “safe”.
It was previously observed that most did not realize the importance of investments but with the developing online infrastructure, mutual funds are progressing well. Investing is just as good as saving money for future means and needs. The right distribution of money is the clear agenda of mutual funds in India today, especially for the busy working class strata. While there are enough opinions on what you should be doing with your money, the one majorly is the “right distribution of money”.
Mutual funds have always been labeled ‘unsafe’, but many people are visibly experimenting mutual funds for the below reasons:
- The built in diversification of mutual funds makes it’s a balanced, safe bet. In fact, just investing in itself will distribute the money towards productive fund choices.
- It is way convenient to hold mutual funds which is much easier than relying on individual stocks and bonds.
So, let’s briefly understand is Mutual Funds really safe?
Safety of mutual fund investments can be essentially assessed by:
- Survival and sustenance of the company after investments made
- Capital protection and continued returns
There’s never an investment which doesn’t involve risks, but then the magnitude of that risk varies. Mutual Funds Tax Savers can be an ideal choice to get value for money. But what you ideally should know before investments is thorough.
Mutual Fund Tax Savers: Earn Wisely & Save Taxes
Your money is just as safe as ever. Not all investments can be looted away. If you are thinking about the risk involved, then mutual funds can be counted completely safe and secure. If the investment feels insecure because someone may not pool into the profitable avenue, then it’s time we change our point of view here! In times of sky-rocketing inflation rates, it’s quite tedious to save money. So what can one do instead of putting money to savings account? This is when Mutual Fund Tax Savers play an inevitable role to grow money over time and make more than leaving your money idle. These tax savers help you with tax deductions and tax rebates under Section 80C of Income Tax 1981. Equity linked savings scheme qualify first for Mutual Fund Tax Savers. A pool of money is created by different individuals/investors to allocate money into equity of other companies and earn profit to top-up. This scheme is a clear win-win for the investors!
SEBI and Association of Mutual Funds in India (AMFI) are the regulatory authorities over the different mutual fund companies. They strategize and plan all the rules and regulations of the Mutual Fund companies. A robust due diligence is conducted on these companies for closer supervision. To summarize, any mutual fund company is just as safe as a banking institution.
SEBI Guidelines : Mutual Funds in India:
We can quickly have a look at some guidelines presented by SEBI for giving direction to mutual funds in India:
- The guidelines dictate definition of Guarantor as someone who in his capacity creates a mutual fund. The role of the guarantor is to make revenues by putting together a mutual fund and handing it to the fund manager. In fact, definition of all the capacities are done by SEBI itself.
- SEBI has defined the categories of mutual funds into 5 distinct groups: Equity, Debt, Hybrid, Solution Oriented & Others.
- Large, mid and small cap has been defined clearly to further support the Mutual Funds processes.
- A fixed lock in period for solution-oriented schemes is decided upon.
- Permission in 1 scheme in each category is plausible excepting for Index Funds/ Exchange Traded Funds (ETF), Sectoral/Thematic Funds and Funds of Funds.
Today, mutual fund investments are bearing improved, tax saving returns. When safety as a plus is talked about, Mutual Funds may or may not assure any fixed paybacks but then it cannot also be doing poor investment product selling in the market. The sole idea behind dropping funds into mutual funds is the risk-reward trade off it offers to say the least. Mutual funds can also be tax saving unlike the belief that was fed into earlier. In fact, short term gains can be quite taxing and cost much more than planned initially. Hence, mutual funds can pose to be a great choice there! Mutual funds are quite based on the highs and lows of the companies in which it’s invested. And hence, this investment stays volatile yet highly rewarding at times. Many mutual fund types ensure long term investment value and also with greater compounding. The best way is to distribute the investments amongst good and bad per se. Best Mutual Funds can be estimated based on their market performance and history. Let’s have a quick glance as under:
Top Performing Mutual Funds in the Indian Market
SBI– SBI is India’s largest bank and SBI Mutual Funds is the largest sponsored mutual fund too. This mutual fund has an undeniable growth and performance record in prudent investments and concentration wealth building. SBI Mutual Fund is a joint initiative between the State Bank of India and Societe Generale Asset Management.
Reliance– Reliance Mutual Fund is one of India’s pioneer Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 1,07,749 Crores and an investor headcount of over 72 Lakh folios which is tremendously huge.
HDFC– HDFC is one of the most popular mutual fund houses in India. It has a wide spectrum if fund options for investors to choose from and is considered the most reliable fund managers. The schemes are proportionately spread out to suit every investor type.Whether you seek growth funds, income funds, or even retirement funds, HDFC has it all.
Birla Sun Life– Birla Sun Life Fund is recognized for its knowledge base and judicious distribution between equity & debt fund management. Every product is fully supported highest levels of experience and expertise.
To conclude, mutual funds make complete sense today. The concept is to choose an mutual fund investment option that matches your financial goals the best.