Mutual Funds

What is a  direct mutual fund ? Should y ou choose these funds over your regular peers? A closer understanding of the two types is essential before deciding.  Regular Mutual Funds  You can u se a  mutual funds app  to invest in these funds, and they are ones where you invest through any broker, intermediary, or distributor. The intermediaries will handhold the customer throughout the investment process and assist with documentation and transactions while offering advice.  Direct Mutual Funds These plans do not come with any assistance or support from intermediaries. In this case, you will buy mutual funds directly from the mutual fund house or AMC (asset management company). These plans often ensure higher returns owing to lower expense ratios than regular funds. However, investors with a solid understanding of various schemes and the market can only choose them since this is the only available guidance.  Things to Consider When Switching to a Direct...

Knowing the differences between short-term and long-term investments can help you create your investing strategy. This is usually the primary step to choosing investment securities that align with your financial goals. Read on to learn about long-term and short-term investments and how they differ.  What Are Long-Term Investments? You can buy and hold them for like ten or more years. Such an investment strategy is ideal for long-term goals like saving for higher education to be pursued abroad. If you can keep your money invested for several years before making withdrawals, you can take on a higher risk. In this case, you can consider equity schemes like the best ELSS mutual funds . An extended period can help your investment substantially recover from short-term market fluctuations. However, that cannot be promised. An investment might lose or gain value over the long term.  What Are Short-Term Investments? You can purchase and hold them for a shorter period, like three or few...

Equity-Linked Savings Schemes (ELSS) and Unit-Linked Insurance Plans (ULIP) are popular tax-efficient investment choices in India. There are, however, some significant differences between the two. ELSS funds are tax saving mutual funds that invest largely in equity shares of publicly traded firms. These funds' returns are market-linked and generally tend to outperform fixed deposits and other fixed-income assets. The returns, however, are subject to market swings, and there is risk associated with this investment.  In contrast, a ULIP is an insurance policy that also includes an investment component. The ULIP premium is invested in several fund alternatives, such as equity, debt, or a combination of the two. ULIPs also provide life insurance coverage, with the death benefit being the greater of the sum assured or the fund value.  Let us look at the differences between ULIPs and ELSSs in more detail. The Distinction Between Tax Benefits Equity-Linked Savings Schemes (ELSS) and ...

What is a systematic investment plan (SIP)? A mutual fund house offers an investment mode wherein you can put a fixed amount of money in a chosen scheme at regular intervals (monthly, quarterly, half-yearly, or yearly). After selecting the best mutual fund , you can start depositing as little as ₹500 in it through SIP and enjoy various other benefits like significant tax savings. Here is why SIPs are considered the best tax-saving instrument.  How Can SIP Help You Save Tax?  A significant part of your income goes into tax payments, reducing your savings. But the good news is you can invest flexibly in the top tax-saving mutual funds or equity-linked savings scheme (ELSS) funds through SIP for wealth creation.  In this case, you are eligible to claim a deduction of up to ₹1.5 lakh from your taxable income in a financial year, according to the Income Tax Act, Section 80(C). ELSS funds are the only equity funds that allow you to claim such a high tax deduction. By investing...

Newbie investors sometimes need clarification on equity funds and equity-linked savings scheme (ELSS) mutual funds. ELSS is an equity mutual fund with a tax rebate and a lock-in period. Its portfolio is similar to that of any diversified large-cap equity fund. Before making an investment decision, read everything about tax-saving mutual funds vs other equity mutual funds.  What Is an Equity Mutual Fund? Equity mutual funds invest a large part of their corpus in the stocks of companies on the lists of Indian and overseas stock exchanges. They invest across multiple market cap segments and sectors. The investment goal is long-term capital growth and appreciation. The returns are subject to risk since they are market-linked. So, you may witness short-term volatility. To ride through shorter-term market ups and downs, it's best to stay invested for 5-7 years to make the most of your investments. When you redeem your investment in an equity fund, the asset management company (AMC) levie...