Mutual Funds: Here are some reasons to know why you should invest in mutual funds in India..
To achieve your financial goals and make your life secure, it is very important to invest your hard-earned money in the right place. Choosing the right option from the plethora of investment options available in the market is a difficult task. Along with traditional savings schemes, the investment option that has attracted the most attention in recent times is mutual funds. In July 2023, investors invested Rs 15,000 crore in mutual funds through the Systematic Investment Plan.
The million-dollar question is why Indian retail investors have become obsessed with mutual funds. There is no single reason for mutual funds to become popular. Rather, due to its ten features, mutual fund inflow is increasing day by day.
The returns of mutual funds are higher than other traditional methods of investment including bank FD. In the long term, the returns of some funds are double-three times that of FD. Its property of increasing wealth is making it popular among common investors.
Systematic Investment Plan (SIP) has contributed the most in popularizing mutual funds. By depositing a small amount after an indefinite interval, you can get good returns from the share market.
You can also save tax by investing in mutual funds. The government provides tax exemption under the Income Tax Act on money invested in Equity Linked Savings Schemes (ELSS). Getting tax exemption along with good returns is also a reason for increasing inflow.
There is nothing hidden in mutual funds. Regular updates about the fund's performance, holdings, and expenses are given to the investor. This transparency also encourages investors to invest money in mutual funds.
Investment decisions in mutual funds are taken by professional managers on your behalf. They have the skill to take advantage of market fluctuations, which benefits you.
Mutual funds are within everyone's reach. You can start investing in it even with Rs 500. It is very easy for both new and old investors to invest money in it.
Mutual funds provide an opportunity to invest money in many categories. Investors can choose mutual fund schemes as per their risk appetite. This flexibility is also a reason for increasing interest in it.
Liquidity is very high in mutual funds. Open-ended funds allow you to buy and sell units at any time. Meaning whenever you need money, you can easily sell the units and keep them in your pocket.
Mutual fund investment is the best tool for portfolio diversification. Mutual funds invest in diverse categories of assets. This greatly reduces the possibility of loss to the overall portfolio.
The long-term returns of mutual funds are excellent. Its ability to prove to be a wealth creator in the long term is also a major strength that attracts investors it.
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