How to invest in mutual funds

How to invest in mutual funds

Now a days investing in mutual funds is one of the best investment options to get high returns . If you have good market knowledge you can earn a lot of money from mutual funds.

In India you have two options to invest in mutual funds. The two major ways of investing in mutual funds are explained further.

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Invest in a good old-fashioned offline way :

Look out for some mutual fund advisor in your area and invest using his help. The advisor will make you through all the formalities and different plan schemes while investing in a mutual fund.

This is a better way when you are investing first time and you have little or no knowledge about investing in a mutual fund.

Find a mutual fund advisor in your area and invest with his help. The advisor will help you with formalities and advice on mutual fund schemes, etc. This is a better way if you are new to mutual funds or not very clear about concepts related to mutual funds and investments.

Second method is to invest online.

This is an option for the people who are well versed with the mutual funds.

However before investing online in mutual funds you have to do some homework.

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First all you should have the answer that why are you planning to invest in a mutual fund. It will help you to identify your financial goals.

Next thing is how much time you want to achieve your goal. That will clear out how much you have to invest in mutual fund.

Once you have all the basic facts, you can choose your mutual fund schemes.

To meet Short Term finances : Choose debt mutual funds.

3 year medium Term goals : Conservative Equity Hybrid Funds

5 year goals : Aggressive Hybrid Schemes

Always choose a plan with a consistent performance record. Also, keep an eye on your investment. You should also review their performance.

Types of Mutual Funds

Mutual funds are of different types. Some major mutual funds are:

Debt Mutual Funds –

These Mutual funds put your money in the debt market and make profit. They are relatively safer in-comparison to Equity Mutual Funds because its rate fluctuate a little with the share market. You can also know which funds are debt funds and which are equity mutual funds by just seeing the details of the fund you are interested.

Equity Mutual Funds-

These Mutual funds put your money in the share market through market experts and earn profit. It has more risk that the Debt funds but definitely it is safer than directly investing into share market. When there is more risk there is more profit so you will have more profit into these funds. Generally it is directly proportional to share market ups and downs.

Debt(x part)+Equity(remaining part) Funds-

These Mutual funds put your money in the debt as well as equity. Safety and Risk depends upon the proportion in which your money is invested in debt and equity .For example like you have 100 rupees and it is invested 30% in debt and 70% in equity then it is more entity oriented and depends more on share market and incurs more risk.

Pre-requisite before Investing in Mutual Funds

You need to have PAN card and KYC done

You need a bank account

Step by Step Process to Invest in Mutual Funds Online

  1. Link your aadhar with mobile number. date of birth and email id.
  2. Link AADHAR with PAN card in Bank.
  3. Check if the mobile number and email address is receiving OTP.
  4. Do kyc online via e-kyc sbi
  5. Use Kuvera or Paytm MF to start an account (you can use other online websites also)
  6. Select A Mutual Fund to Invest.
  7. Invest

I hope all you doubts about how to invest in mutual funds are cleared now. If you have any doubts then comment in the comment section below.

Thanks.

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