Let your savings take a new avatar with Mutual Funds.
Traditionally, investing was very one dimensional. You could either invest your savings into options with a fixed tenure like FD, PPF and NSC, or in shares which are linked to the Markets. But to have access to your money there was no alternative to a savings account.
But with the arrival of Mutual Funds, a lot has changed in the investment scenario. Things have become a lot more dynamic since Mutual Funds offer schemes that are literally managed to suit different investment tenures as well as provide high liquidity. As long as you stay invested for the recommended duration of a scheme, you can rest assured that the returns earned are optimal.
As if that wasn’t enough, you can invest as much as you want at absolutely your convenience!
So now that you’re a little more confident in your knowledge of Mutual Funds, another stepping stone would be what is the simplest way to test out or start investing in Mutual Funds? The easiest way would be to start an SIP or Systematic Investment Plan. An SIP is not a scheme but rather a feature that is available in most schemes, which allows you to invest a fixed sum either monthly or quarterly, for a predetermined period decided by you. Just like tiny droplets of water that join together to form an ocean, each little instalment you pay in an SIP will one day amount to a lot. And the best part is that you can decide the amount of each instalment!
Some of the benefits of SIP's
- They promote a disciplined approach because you’re committed to invest a fixed amount on a regular basis.
- They ensure that you’re not swayed by any market sentiment.
- You are free to choose any amount and in most schemes you can withdraw at your convenience.
So now do you agree that Mutual Funds are indeed savings in a new avatar?
Investing in Mutual Funds
Before you commit to any fund, there are a few things you need to sort out first. It is extremely helpful if you map out your financial goals. With a set goal in mind, everything you do in some way is a step toward achieving it. It is never a good idea to invest based on hearsay. There’s no point in trusting unreliable sources because you’ll only end up being side tracked from your path. Hence it is always a good idea to consult a financial advisor or planner, who can assist you in choosing the right funds.
Once you have decided on the funds and the amount, the actual task of investing is far simpler. All you have to do is fill up a KYC form and the relevant scheme form. Once your investment is made, you get a transaction confirmation on your mobile and an account statement on your e-mail ID.