{"id":1517,"date":"2023-02-18T07:10:13","date_gmt":"2023-02-18T07:10:13","guid":{"rendered":"https:\/\/www.gettogetherfinance.com\/blog\/?p=1517"},"modified":"2026-04-23T15:19:27","modified_gmt":"2026-04-23T09:49:27","slug":"what-are-mutual-funds","status":"publish","type":"post","link":"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/","title":{"rendered":"What are Mutual Funds? A Complete Beginner&#8217;s Guide (2026)"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"598\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-18-1776929119-psSx-1024x598.webp\" alt=\"What are Mutual Funds? A Complete Beginner's Guide\" class=\"wp-image-11873\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-18-1776929119-psSx-1024x598.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-18-1776929119-psSx-300x175.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-18-1776929119-psSx-768x448.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-18-1776929119-psSx.webp 1228w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_78 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Overview\" >Overview\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#What_Are_Mutual_Funds\" >What Are Mutual Funds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#1_Beneficial_for_a_novice\" >1. Beneficial for a novice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#2_Advantage_of_scale_and_diversity\" >2. Advantage of scale and diversity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#How_Do_Mutual_Funds_Work\" >How Do Mutual Funds Work?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Types_of_Mutual_Funds\" >Types of Mutual Funds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#1_Bond_Funds\" >1. Bond Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#2_Dividend_Funds\" >2. Dividend Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#3_Tax_saving_Funds\" >3. Tax saving Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#4_Index_Funds\" >4. Index Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#5_Income_Funds\" >5. Income Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#6_Money_Market_Funds\" >6. Money Market Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#7_Exchange_Traded_Funds\" >7. Exchange Traded Funds<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#How_Should_One_Select_a_Mutual_Fund\" >How Should One Select a Mutual Fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#What_are_The_Advantages_of_Mutual_Funds\" >What are The Advantages of Mutual Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Disadvantages_of_Mutual_Funds\" >Disadvantages of Mutual Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#What_is_NAV_in_Mutual_Funds\" >What is NAV in Mutual Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#What_is_SIP_and_How_Does_it_Work\" >What is SIP and How Does it Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Mutual_Funds_or_Fixed_Deposits_Which_is_Better\" >Mutual Funds or Fixed Deposits: Which is Better\u00a0?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#How_to_Choose_the_Right_Mutual_Fund\" >How to Choose the Right Mutual Fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#How_to_Invest_in_Mutual_Funds_in_India_2026\" >How to Invest in Mutual Funds in India? (2026)\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#What_are_ways_one_can_invest_in_mutual_funds\" >What are ways one can invest in mutual funds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#1_Direct_investment\" >1. Direct investment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#2_Online_Mutual_Fund_investment_platforms\" >2. Online Mutual Fund investment platforms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#3_Using_a_DEMAT_account\" >3. Using a DEMAT account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#4_Mutual_Fund_agents\" >4. Mutual Fund agents<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Mutual_Fund_Taxation_in_India\" >Mutual Fund Taxation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Top_AMCs_in_India\" >Top AMCs in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Why_AMCs_Are_Popular\" >Why AMCs Are Popular?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-are-mutual-funds\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview\"><\/span>Overview\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mutual funds are a simple and easy way to invest, in which several people pool their money and a professional manager manages it. This benefits the investors as they don\u2019t need to have in-depth knowledge or constantly monitor the market to participate in it.\u00a0 This blog tells you every single detail that you need to know about mutual funds.\u00a0<\/p>\n\n\n\n<p><strong>\u201cThe stock market is a system that transfers money from the impatient person to the patient one\u201d<\/strong><\/p>\n\n\n\n<p class=\"has-text-align-right\"><em>-Warren Buffett\u00a0<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_Mutual_Funds\"><\/span>What Are Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-2-1776929131-4G5i-1024x207.webp\" alt=\"What Are Mutual Funds?\" class=\"wp-image-11874\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-2-1776929131-4G5i-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-2-1776929131-4G5i-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-2-1776929131-4G5i-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-2-1776929131-4G5i.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>When we are up to mutual funds, we have a lot of questions at the same time about how to invest in it and when to invest in them.\u00a0<\/p>\n\n\n\n<p>Mutual fund, as the name suggests, is a fund that is owned by a company and managed by a fund manager. People put their money in these funds, and the fund manager pools all the money and invests it in stocks, <a href=\"https:\/\/www.gettogetherfinance.com\/blog\/what-is-bond-yield\/\" target=\"_blank\" rel=\"noreferrer noopener\">bonds <\/a>or some short-term debt funds. There are 2 main reasons why mutual funds are formed:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Beneficial_for_a_novice\"><\/span>1. Beneficial for a novice <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When someone knows not much about markets or investing, it\u2019s very difficult to manage the money. He\/she wouldn\u2019t know how to trade stocks or how to invest for the long term. So, for these people, a simple way is just to give their money to someone else who can manage it properly and help them grow their money.\u00a0<\/p>\n\n\n\n<p>But, you can not give all your life\u2019s savings just to anyone. What if the person you gave money to ran away with it?? That\u2019s why mutual funds are set up so that you can put your money into funds and the fund managers can manage it.\u00a0Since funds are managed by AMC, and AMCs are monitored by trusts, your money is safe. Plus these fund managers are intelligent, keeping track of markets and all the economic activities; they are very much qualified to manage your money.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Advantage_of_scale_and_diversity\"><\/span>2. Advantage of scale and diversity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Suppose you only have Rupees 2,000 with you, and you want to invest it in a stock, which costs around Rupees 4,000? You just cannot buy half-stock, and you don\u2019t have enough money to buy a single share.\u00a0Or you want to <a href=\"https:\/\/www.gettogetherfinance.com\/blog\/portfolio-diversification\/\" target=\"_blank\" rel=\"noreferrer noopener\">diversify your portfolio <\/a>to reduce market risk, but you cannot buy 10 different stocks with that amount. So what will you do? You put your money into a Fund, similarly, other people also invest their money into the fund, and the whole amount is pooled at one place and it can be invested in some stocks or bonds. It can also be diversified across multiple stocks or bonds to reduce the risk.\u00a0That is why the mutual funds are formed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Do_Mutual_Funds_Work\"><\/span><strong>How Do Mutual Funds Work?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"206\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-4-1775641211-By80-1024x206.webp\" alt=\"How Do Mutual Funds Work?\" class=\"wp-image-11831\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-4-1775641211-By80-1024x206.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-4-1775641211-By80-300x60.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-4-1775641211-By80-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-4-1775641211-By80.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Mutual funds involve an easy process where experts manage your money and invest it to help it grow. They invest the money in different assets like bonds, stocks, or other securities.\u00a0<\/p>\n\n\n\n<p>First, you invest your money in a mutual fund. Then all the money is collected and merged into one big fund. Now, experts use this money to invest in stocks, bonds, etc. If the investments do well, the fund will grow and profit the investors. If they do not perform well, then your money will go down. Each investor has several units based on the fund\u2019s current price (NAV) and can redeem them, except during the lock-in period.\u00a0<\/p>\n\n\n\n<p>Key Insight: Rather than just \u201cinvesting for returns,\u201d smart investors use mutual funds for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Wealth creation<\/li>\n\n\n\n<li>Retirement planning<\/li>\n\n\n\n<li>Child education<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Mutual_Funds\"><\/span>Types of Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s discuss different types of Mutual Funds in India<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"700\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/i-1-1776937183-tnt8.webp\" alt=\"Types of Mutual Funds\" class=\"wp-image-11883\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/i-1-1776937183-tnt8.webp 1200w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/i-1-1776937183-tnt8-300x175.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/i-1-1776937183-tnt8-1024x597.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/i-1-1776937183-tnt8-768x448.webp 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<p>In India, mutual funds are classified based on fund structure, asset allocation, and investment objectives. Each category has its own objectives, such as managing risk, growing your money, and earning a stable income. If you understand these types of mutual funds, you can select funds according to your financial goals and risk level.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Equity Fund<\/strong><\/li>\n<\/ul>\n\n\n\n<p>These are those funds that invest mainly in the stocks of a company. They give higher returns but also have risk. The examples of equity mutual funds are sectoral funds, large-cap funds, mid-cap funds, and small-cap funds. These funds are appropriate for those investors who seek long-term growth and can handle market conditions.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debt Fund<\/strong><\/li>\n<\/ul>\n\n\n\n<p>These types of mutual funds invest in fixed-income securities such as treasury bills, bonds, and money market instruments. Debt mutual funds are much safer than equity funds because they give more stable returns and have lower risk. This makes them ideal for conservative inventors.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Hybrid <\/strong><strong>Fund<\/strong><\/li>\n<\/ul>\n\n\n\n<p>These types of mutual funds are also known as balanced funds. Hybrid funds are equally distributed in equities and debt. The main objective of this fund is to have a regular income with reasonable profit at the same time. The examples include conservative hybrid funds, balanced funds, and aggressive hybrid funds.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Solution-oriented <\/strong><strong>Fund<\/strong><\/li>\n<\/ul>\n\n\n\n<p>It is those mutual funds that are created to fulfil specific financial goals, such as children\u2019s education and retirement, etc. It mainly focuses on long-term financial goals and includes a mandatory lock-in period. This helps people to invest their money regularly and also keep it for a longer time.\u00a0<\/p>\n\n\n\n<p>Along with this, there are other types of mutual funds, such as index, ETFs, FOFs domestic and FOFs overseas.\u00a0<\/p>\n\n\n\n<p><strong>Some more Mutual Funds are listed below:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Bond_Funds\"><\/span>1. Bond Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investments with a fixed rate of return, such as corporate bonds, <a href=\"https:\/\/www.gettogetherfinance.com\/blog\/government-sovereign-bonds\/\" target=\"_blank\" rel=\"noreferrer noopener\">government bonds<\/a>, or other debt instruments, are the primary focus of a Bond Fund. The shareholders receive interest income from the portfolio of the fund. These funds are frequently & actively managed to acquire bonds that are relatively undervalued in order to sell them at a good profit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Dividend_Funds\"><\/span>2. Dividend Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds consists of stocks which provide high and regular <a href=\"https:\/\/www.gettogetherfinance.com\/blog\/best-dividend-paying-stocks-in-india\/\" target=\"_blank\" rel=\"noreferrer noopener\">dividends<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Tax_saving_Funds\"><\/span>3. Tax saving Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>these funds are designed in such a way that they give tax benefits to the people. These are also known as equity linked saving schemes(ELSS).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Index_Funds\"><\/span>4. Index Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds are the type of funds that invest in the major market index such as Nifty or Bank Nifty.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Income_Funds\"><\/span>5. Income Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These types of funds are generally made for the cash flow to the investors. Investors are generally retirees who want a stable income. In income funds we invest in government and high quality debt only.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Money_Market_Funds\"><\/span>6. Money Market Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Money market funds are also known as treasury bills. These are the risk free funds and for a short period of time which provides a decent profit to the investor.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Exchange_Traded_Funds\"><\/span>7. Exchange Traded Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These are generally not considered as mutual funds, but they employ strategies that consist of mutual funds. People generally sell ETFs on the same trading day, so it can also be considered a short-term investment<strong>.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Should_One_Select_a_Mutual_Fund\"><\/span>How Should One Select a Mutual Fund?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before you select the mutual fund, you need to shortlist the mutual fund category. The very first step is to identify the financial goal with the duration and the expected amount of the target. We don\u2019t know if the market will rise or fall in the short term. For any short-term financial goal, it is better to invest in short-term debt funds. <\/p>\n\n\n\n<p>Always build an emergency fund by investing in liquid funds to take care of unexpected expenses.\u00a0One needs to stay updated with economic activities at the national and international levels. The more you learn and understand about mutual funds, the more confident you become with your investment.<\/p>\n\n\n\n<p><strong>Also Read<\/strong>: <a href=\"https:\/\/www.gettogetherfinance.com\/blog\/step-up-sip\/\" target=\"_blank\" rel=\"noreferrer noopener\">Step Up SIP<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_The_Advantages_of_Mutual_Funds\"><\/span>What are The Advantages of Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"598\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-20-copy-1776929195-E78g-1024x598.webp\" alt=\"What are The Advantages of Mutual Funds?\" class=\"wp-image-11875\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-20-copy-1776929195-E78g-1024x598.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-20-copy-1776929195-E78g-300x175.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-20-copy-1776929195-E78g-768x448.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-20-copy-1776929195-E78g.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>In the financial market, mutual funds are the best way to invest your money. It is suitable for both beginners and experienced investors, because mutual funds help in achieving financial goals effectively. Additionally, their accessibility and flexibility make them the best choice for investors.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Professional Management<\/strong><\/li>\n<\/ul>\n\n\n\n<p>While investing in mutual funds, you don\u2019t need to worry because your investment is managed by an experienced fund manager. They research securities, identify market trends and manage your portfolio to gain better returns.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Diversification<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Within mutual funds, you can invest across so many assets, such as bonds, stocks, and other securities. By allocating your money in different assets, you can reduce your overall risks, as the loss in one investment is covered by the other one.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Affordability<\/strong><\/li>\n<\/ul>\n\n\n\n<p>In mutual funds, you can start investing from a small amount through SIP. This makes investment easy and affordable for anyone with different financial capabilities.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Liquidity<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Mutual funds allow you to buy or sell your investment at any time because it has high liquidity. Also, this offers you the flexibility to get money when you need it.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Transparency<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Investors get regular updates about their investments, which makes the transparency level of mutual funds higher. This includes fund performance, details of the portfolio, and other crucial information.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tax Benefits<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Some mutual funds, like ELSS (Equity Linked Savings Scheme), provide tax benefits under Section 80C. This enables you to save your money on taxes and grow an investment.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Mutual_Funds\"><\/span>Disadvantages of Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-6-1776929236-SzAl-1024x207.webp\" alt=\"Disadvantages of Mutual Funds\" class=\"wp-image-11876\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-6-1776929236-SzAl-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-6-1776929236-SzAl-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-6-1776929236-SzAl-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-6-1776929236-SzAl.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>As we discussed earlier, some advantages of mutual funds include low cost, ease of investment, and tax savings. Mutual funds also include a few disadvantages, which are as follows:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Over-Diversification<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Over-diversification means investing in multiple assets, which can affect you by lowering the impact of high-performing investments. Thus, even if certain investments are doing very well, overall returns may remain average, limiting your returns.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Expense Ratio & Fees<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Some fund companies charge a small fee to manage your money, which slowly reduces your earnings over time. Also, if the fees are higher, it impacts your overall returns and long-term growth.\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lock-in Period (in Some Funds)<\/strong><\/li>\n<\/ul>\n\n\n\n<p>There are some funds, like ELSS (tax-saving funds), that have a fixed period (eg, 3 years). During this time, you cannot take out the money in any type of emergency, which becomes a risk. Also, it decreases your financial flexibility and liquidity.\u00a0\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Exit Load Charges<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Some mutual funds charge a fee if you take out your money before a certain period. They apply this fee so that people don\u2019t withdraw their money too early. As a result, it lowers your final returns and the payout you receive.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_NAV_in_Mutual_Funds\"><\/span>What is NAV in Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-7-1776929246-Mqml-1024x207.webp\" alt=\"What is NAV in Mutual Funds\" class=\"wp-image-11877\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-7-1776929246-Mqml-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-7-1776929246-Mqml-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-7-1776929246-Mqml-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-7-1776929246-Mqml.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>NAV is the price per unit of a mutual fund. Just like a stock has a price, a mutual fund has a NAV.\u00a0 If a fund\u2019s NAV is \u20b940, it means one unit of that fund costs \u20b940 today.<\/p>\n\n\n\n<p><strong>For example<\/strong>: If you invest \u20b98,000 in a mutual fund with a NAV of \u20b940, you will receive 200 units\u00a0 (\u20b98,000 \u00f7 \u20b940 = 200 units). If the NAV later increases to \u20b950, the value of your investment will become \u20b910,000 (200 units \u00d7 \u20b950).<\/p>\n\n\n\n<p>It goes up or down every day, depending on whether the stocks or bonds in the fund are doing well.\u00a0<\/p>\n\n\n\n<p><strong>Simple Formula:<\/strong><\/p>\n\n\n\n<p><strong>NAV <\/strong>= Total Number of UnitsTotal Assets \u2013 Total Liabilities\u200b<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_SIP_and_How_Does_it_Work\"><\/span>What is SIP and How Does it Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"206\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-8-1776929254-vHU7-1024x206.webp\" alt=\"What is SIP and How Does it Work\" class=\"wp-image-11878\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-8-1776929254-vHU7-1024x206.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-8-1776929254-vHU7-300x60.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-8-1776929254-vHU7-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-8-1776929254-vHU7.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>SIP is a way of investing in mutual funds regularly with a fixed amount. You can do it weekly, monthly, or yearly, instead of investing a large amount at once. It helps you build a habit of saving and investing over time. The main advantage of SIP is that you can start investing from a small amount and grow your money. It also protects you from market ups and downs, as you keep investing regularly, no matter how the market is doing.<\/p>\n\n\n\n<p>SIP works on the concept of <strong>rupee cost averaging<\/strong>, which means you buy more units when prices are low and fewer units when prices are high.\u00a0 Over time, this helps you in balancing your investment cost. Additionally, SIP uses the power of compounding, where your returns grow and help your money multiply in the long run.<\/p>\n\n\n\n<p>A SIP works in the following way:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Pick a Mutual Fund<\/strong><\/li>\n<\/ol>\n\n\n\n<p>You have to always choose a fund that fits your goals and risk level. It can be an equity, a debt, or a hybrid fund. Those people can choose equity if they want higher returns and can take risks.\u00a0 Also, you can select debt if you want to protect your capital or can take a low risk. At last, you can go for a hybrid if you want both growth and safety.\u00a0<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Decide Investment Amount<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The people have to select a fixed amount to invest regularly, such as 600, 1200, or more. It is important to choose the investment amount according to your financial capacity to avoid the financial stress of daily expenses.\u00a0<\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Set the Investment Date<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It is important to choose a specific date for your SIP so that the selected amount automatically gets debited from your bank account. It helps you build a discipline habit without missing any payments.\u00a0<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Units Are Allotted Based on NAV<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Every time you invest, you get units based on that day\u2019s price (NAV). If NAV is \u20b940 and you invest \u20b9400, you get 10 units. This makes the investment fair because everyone buys units on the same day at the same price.\u00a0<\/p>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li><strong>Invest Consistently\u00a0<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Once you select the investment date, the money will automatically be deducted from your bank account. It repeats every week or month, as per your choice. You don\u2019t need to do anything; the money will grow slowly over time.<\/p>\n\n\n\n<p>Key Insight: Always remember, it is not necessarily that a mutual fund that has delivered high returns in the past will perform well in the future. That\u2019s why it is important to check:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Risk level of the fund<\/li>\n\n\n\n<li>Monitor the past performance and expertise of the fund manager<\/li>\n\n\n\n<li>Consistency of returns over time<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Mutual_Funds_or_Fixed_Deposits_Which_is_Better\"><\/span>Mutual Funds or Fixed Deposits: Which is Better\u00a0?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-9-1776929269-e3Q8-1024x207.webp\" alt=\"Mutual Funds or Fixed Deposits: Which is Better?\u00a0\" class=\"wp-image-11879\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-9-1776929269-e3Q8-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-9-1776929269-e3Q8-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-9-1776929269-e3Q8-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-9-1776929269-e3Q8.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Both mutual funds and fixed deposits (FDs) are popular investment options in India, but they are used for different purposes.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Basis\u00a0<\/strong><\/td><td><strong>Mutual Funds\u00a0<\/strong><\/td><td><strong>Fixed Deposits<\/strong><\/td><\/tr><tr><td><strong>Risk<\/strong><\/td><td>Moderate to High<\/td><td>Very Low<\/td><\/tr><tr><td><strong>Liquidity<\/strong><\/td><td>High\u00a0<\/td><td>Moderate\u00a0<\/td><\/tr><tr><td><strong>Taxation<\/strong><\/td><td>Taxation depends on the type and holding period<\/td><td>Interest is fully taxable<\/td><\/tr><tr><td><strong>Returns<\/strong><\/td><td>Market-linked returns\u00a0<\/td><td>Fixed and guaranteed<\/td><\/tr><tr><td><strong>Safety<\/strong><\/td><td>Safety is dependent on market performance\u00a0<\/td><td>It is highly safe<\/td><\/tr><tr><td><strong>Investment Style<\/strong><\/td><td>SIP or lump sum<\/td><td>Lump sum<\/td><\/tr><tr><td><strong>Returns Potential<\/strong><\/td><td>Higher in the long term<\/td><td>Lower but stable<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Choose_the_Right_Mutual_Fund\"><\/span>How to Choose the Right Mutual Fund?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"206\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-10-1776929283-w6aM-1024x206.webp\" alt=\"How to Choose the Right Mutual Fund\" class=\"wp-image-11880\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-10-1776929283-w6aM-1024x206.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-10-1776929283-w6aM-300x60.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-10-1776929283-w6aM-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-10-1776929283-w6aM.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>In order to build a successful investment portfolio, selecting the right mutual fund is the most vital step. As there are a lot of options available in the market, you have to choose the most ideal fund. This requires close examination of your investment horizon, risk level, and financial goals.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Identify Your Financial Goals<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Before investing, you have to set your financial goal, such as how much you want to invest. Along with this, it is also important to know the purpose behind investing, whether it\u2019s for retirement planning, child education or others. This helps you to select the right mutual fund to achieve your financial goal.\u00a0<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Evaluate your Risk Capability\u00a0<\/strong><\/li>\n<\/ol>\n\n\n\n<p>You must evaluate your risk capability before investing in mutual funds to remove unnecessary problems. Generally, equity funds involve higher risk than debt, so choose your investment based on your risk appetite.\u00a0<\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Investment Horizon<\/strong><\/li>\n<\/ol>\n\n\n\n<p>A person always selects a mutual fund based on the duration they want to stay invested. Equity funds are best if you want to invest for the long term, while debt funds are suitable for the short term.\u00a0<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Check Fund Performance<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It is crucial to check the performance of funds in order to understand how they have performed across multiple market situations. This helps you check if the funds are performing well or not, and to know how much return they can give in the future.<\/p>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li><strong>Expense Ratio<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It is basically the charge you pay to a fund manager for managing your funds. If the fee is low, then you can save more money and earn more profit.<\/p>\n\n\n\n<ol start=\"6\" class=\"wp-block-list\">\n<li><strong>Fund Manager\u2019s Track Record<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Before paying fees to a fund manager, it is vital to check their experience and past performance. The reason for this is that you become sure they are the right person to handle your money.\u00a0<\/p>\n\n\n\n<ol start=\"7\" class=\"wp-block-list\">\n<li><strong>Diversification<\/strong><\/li>\n<\/ol>\n\n\n\n<p>A person has to always invest in various asset classes and sectors to reduce their risk. This is because the one investment which is performing well can cover the investment which is at a low level.\u00a0<\/p>\n\n\n\n<ol start=\"8\" class=\"wp-block-list\">\n<li><strong>Understand your Fund\u2019s Objective<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Before investing, it is important to understand the objective of the funds and investment strategy. This helps you make sure that the funds match your financial goals and expectations.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Invest_in_Mutual_Funds_in_India_2026\"><\/span>How to Invest in Mutual Funds in India? (2026)\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"206\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-11-1776929300-qh4n-1024x206.webp\" alt=\"\" class=\"wp-image-11881\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-11-1776929300-qh4n-1024x206.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-11-1776929300-qh4n-300x60.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-11-1776929300-qh4n-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-11-1776929300-qh4n.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Now, investing in mutual funds in India has become easy, all thanks to the simplified process and digital platforms. Whether you are a beginner or someone who wants to grow your money, you can start your investment journey with just a few simple steps. Here are some steps that you can follow to get started:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Define Your Goals<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Always have a clear idea about why you are investing. Your goal could be a child\u2019s education, retirement planning, building wealth, or fulfilling short-term goals. This helps you select the right mutual fund, decide how much to invest, and stay focused for the long term.<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Pick the Right Fund<\/strong><\/li>\n<\/ol>\n\n\n\n<p>A person needs to choose a fund based on their goals and risk level. If you want lower risk and stability, then<strong> <\/strong>debt funds<strong> <\/strong>are the best option. However, if you are willing to take a higher risk in exchange for higher returns, then go for equity funds. If you want a balance between risk and return, hybrid funds are a suitable choice, as they provide stability and growth.<\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Complete KYC (Know Your Customer)<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Before investing, it is necessary to complete your KYC process. For this, some documents are required, such as an Aadhaar Card, PAN Card, and bank details. Completing the KYC is a mandatory step for all investors as it helps you to verify your identity. Also, it keeps your investment safe, transparent, and free from fraud.\u00a0<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Select an Investment Mode<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Firstly, you have to decide in which mode you want to invest your money. There are 2 types of mode: SIP and lump sum. In SIP, you invest a fixed amount regularly, or in a lump sum, you invest a large amount at once. This decision is crucial because it impacts how your money grows over time. SIP builds a disciplined habit and lowers market risk, while a lump sum you can benefit from investing a large amount of money in good market conditions.\u00a0<\/p>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li><strong>Choose a Platform to Invest<\/strong><\/li>\n<\/ol>\n\n\n\n<p>In mutual funds, you can invest through multiple platforms such as brokers, banks, demat accounts, or directly from the AMC\u2019s website. Also, you can use mobile apps like\u00a0 Zerodha Coin, Paytm Money, and Grow for a better experience.<\/p>\n\n\n\n<ol start=\"6\" class=\"wp-block-list\">\n<li><strong>Start Investing<\/strong><\/li>\n<\/ol>\n\n\n\n<p>After choosing a platform, select the mutual fund you want to invest in, enter the amount, and confirm your investment. The process is simple, quick, and easy to follow, which makes it convenient even for beginners.<\/p>\n\n\n\n<ol start=\"7\" class=\"wp-block-list\">\n<li><strong>Track & Review Your Investment<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Track your portfolio regularly to see how they are doing. Review your investments every 6\u201312 months and make changes in them if your goals or the market change. This helps you to stay on track and minimise risks.\u00a0<\/p>\n\n\n\n<p><strong>Key Insight: <\/strong>Always select a fund based on your risk level and financial goals for a smart mutual fund investment.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_ways_one_can_invest_in_mutual_funds\"><\/span>What are ways one can invest in mutual funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are several ways to invest in mutual funds, some of them are listed bellow:-<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-12-11-1776937263-R79s-1024x207.webp\" alt=\"What are ways one can invest in mutual funds\" class=\"wp-image-11885\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-12-11-1776937263-R79s-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-12-11-1776937263-R79s-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-12-11-1776937263-R79s-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-12-11-1776937263-R79s.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Direct_investment\"><\/span>1. Direct investment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can\u00a0invest in Mutual Funds\u00a0by submitting an application form along with a Cheque or bank draft at the branch office or designated Investor Service Center (ISC) of Mutual Funds or Registrar & Transfer Agents of the respective the Mutual Funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Online_Mutual_Fund_investment_platforms\"><\/span>2. Online Mutual Fund investment platforms<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can also choose to invest online through the websites of the respective\u00a0<strong>Mutual Funds<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Using_a_DEMAT_account\"><\/span>3. Using a DEMAT account<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can use existing DEMAT account and bank account for transacting in mutual funds. All you need to do is log in to your DEMAT account and look for mutual fund investment options.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Mutual_Fund_agents\"><\/span>4. Mutual Fund agents<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investment in Mutual funds can be done by the agents or brokers. It can be suitable for the ones who do not have a DEMAT account or Net banking.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Mutual_Fund_Taxation_in_India\"><\/span>Mutual Fund Taxation in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-13-1776937296-AbqR-1024x207.webp\" alt=\"Mutual Fund Taxation in India\" class=\"wp-image-11886\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-13-1776937296-AbqR-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-13-1776937296-AbqR-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-13-1776937296-AbqR-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-13-1776937296-AbqR.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Mutual funds have become one of the most popular ways to invest in India. This industry has seen rapid growth over the past few years. Mutual fund taxation simply refers to the tax that you pay on the returns you earn from your mutual fund investments. The taxation of mutual funds in India relies on the type of fund and how long you stay invested. Therefore, before investing in mutual funds, it is important to understand tax rules.\u00a0<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Taxation on Debt Mutual Funds<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Debt mutual funds invest mainly in bonds and other fixed-income securities. As per the latest tax rules in India, returns from debt mutual funds are taxed according to your income tax slab. It applies no matter how long you hold the investment. This means your gains are added to your income and taxed in the same way as your salary or other earnings.<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Dividend Taxation<\/strong><\/li>\n<\/ol>\n\n\n\n<p>If you earn income through dividends from mutual funds, it is added to your total income and taxed as per your income tax slab. This means:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You pay tax based on how much you earn.<\/li>\n\n\n\n<li>The dividend you receive is counted as your regular income.<\/li>\n\n\n\n<li>If your dividend income goes above a certain limit, some amount of tax may be deducted automatically (TDS)<\/li>\n<\/ul>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Taxation on Equity Mutual Funds<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Equity mutual funds are a type of mutual fund that invests most of their money in stocks of multiple companies. The main goal of these funds is to grow your money by investing in the stock market.\u00a0<\/p>\n\n\n\n<p>Equity mutual funds usually invest at least 65% of their total money in equities. These comprise large-cap, mid-cap, multi-cap, small-cap, ELSS, flexi-cap, sectoral, and thematic funds, among others. The returns of these fluctuate a lot, which makes them risky, but they give higher returns in the long term.<\/p>\n\n\n\n<p>Equity mutual funds are taxed based on the holding period. If the investment is sold within 12 months, the gains are treated as Short-Term Capital Gains (STCG) and are taxed at 20%.\u00a0<\/p>\n\n\n\n<p>On the other hand, if the investment is held for more than 12 months, the gains are considered as Long-Term Capital Gains (LTCG). In this, gains up to \u20b91.25 lakh per year are tax-free, and anything above that is taxed at 12.5%.<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Tax on Hybrid Funds<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Hybrid funds are a type of mutual fund that invests in both stocks (equity) and bonds (debt). Their taxation depends on the type of fund:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the fund has <strong>65% or more equity<\/strong>, it is taxed like an equity fund<\/li>\n\n\n\n<li>If the equity exposure is <strong>less than 65%<\/strong>, it is taxed like a debt fund<\/li>\n<\/ul>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li><strong>Securities Transaction Tax (STT)<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It is a small tax charged on the buying and selling of equity mutual funds. In mutual funds, STT is generally applied when you sell your units. The tax is automatically deducted from the transaction, so you don\u2019t need to pay it separately. The STT amount is very small, but it ensures that all stock market transactions are properly recorded and tracked.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Top_AMCs_in_India\"><\/span>Top AMCs in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"207\" src=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-14-1776937306-pVPQ-1024x207.webp\" alt=\"Top AMCs in India\" class=\"wp-image-11887\" srcset=\"https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-14-1776937306-pVPQ-1024x207.webp 1024w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-14-1776937306-pVPQ-300x61.webp 300w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-14-1776937306-pVPQ-768x155.webp 768w, https:\/\/www.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/Artboard-12-copy-14-1776937306-pVPQ.webp 1201w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Asset Management Companies (AMCs), also known as fund houses, play a crucial role in managing mutual fund investments. In India, multiple AMCs have built a strong reputation based on their performance, investor trust, and assets under management. Below are given some top Asset Management Companies (AMCs) in India:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\" colspan=\"2\"><strong>Top Mutual Fund Companies in India<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">HDFC Mutual Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">SBI Mutual Fund<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">ICICI Prudential Mutual Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">Kotak Mahindra Mutual Fund<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">UTI Mutual Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">Axis Mutual Fund<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Nippon India Mutual Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">Aditya Birla Sun Life Mutual Fund<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">PPFAS (Parag Parikh) Mutual Fund<\/td><td class=\"has-text-align-center\" data-align=\"center\">Mirae Asset Mutual Fund<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_AMCs_Are_Popular\"><\/span>Why AMCs Are Popular?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investors trust these Asset Management Companies (AMCs) for many reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Offers multiple types of funds such as equity, debt, and hybrid funds<\/li>\n\n\n\n<li>Large Assets Under Management (AUM)<\/li>\n\n\n\n<li>Strong track record and performance<\/li>\n\n\n\n<li>Millions of investors trust them<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mutual Funds are a pool of money which can be invested in securities by the experts and it can generate a consistent return to the investor. Mutual funds are beneficial to all the people who wish to enter the market but don\u2019t know how to do it. People who are having no knowledge about the stock market and securities can also benefit from these funds because they are managed by professionals and they are one of the most liquid forms of investment one can make. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview\u00a0 Mutual funds are a simple and easy way to invest, in which several people pool their money and a professional manager manages it. This benefits the investors as they&#8230;<\/p>\n","protected":false},"author":1,"featured_media":10200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63],"tags":[64],"class_list":["post-1517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds","tag-mutual-funds"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/comments?post=1517"}],"version-history":[{"count":12,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517\/revisions"}],"predecessor-version":[{"id":11888,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517\/revisions\/11888"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media\/10200"}],"wp:attachment":[{"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media?parent=1517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/categories?post=1517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/tags?post=1517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}