What is a Mutual Fund and how to invest in it?

Do you know what a Mutual Fund is and how to invest in it?

Mutual Fund, you must have heard about this many times on the internet or news and also that you can earn money by investing in it.

There are many companies of mutual funds which claim that if you invest in our company, we will give you good returns and also, there are many big banks that do this work. Now even big investors invest in it along with the stock market.

What is a mutual fund

 

What is Mutual Fund?

Mutual funds are a medium for investing money. In this, many investors' money is collected and invested in the stock market. People who do not know much about the stock market invest their money in Mutual Fund itself.

More and more people do not know much about the stock market, in which company they invest so that they get more profit. Suppose you invested in any one company and that company went into loss, then your money will also be drowned, but this is not the case with mutual funds.

These Company invests your money in different companies so that if one company goes into loss then the other company also makes a profit. The people of a mutual fund company are professionals because they have a good idea of ​​which company can grow in the future.

So in simple words, These Company collects money from people and invests them in the Share Market and provides good returns to the investor. That is why it is said that your money is more secure in mutual funds than in the stock market.

 

How to Invest in Mutual Fund?

It is quite easy to invest in it and if you invest in the long term then you get good returns. But the most important thing in this is that while investing in Mutual Fund, always choose only a good and trusted company.

There are many big companies to invest and there are many big banks in the country. Some Mutual Fund companies names are given below –

 

• 5 Paisa.com
• HDFC Bank
• Axis Bank
• DSP Mutual Fund
• Kotak Mahindra
• SBI Mutual Fund

 

Apart from this, you can also invest through many types of Android App. Or you can register by visiting their website. At the moment Groww App is performing very well and it has given a very good rating by the people. You can download this app from the Play Store. And you can take Mutual Fund from it.

you can download Groww app Click Here

You must have heard the name of Paytm, this is an Indian Payment Company, whose founder is Vijay Shekhar Sharma. You can invest in mutual funds from Paytm's Payment Money App. It has been downloaded over 5 million times on the Play store.

 you can download Paytm mutual fund Click Here 

Types of Mutual Funds

As you know these companies invest the money raised by investors in different shares and companies and based on this, there are many types of Mutual Fund. Let's understand this further

There are two types of mutual funds 1. Open-Ended Scheme 2. Close Ended Scheme. We understand this through a table.

 

Open-Ended Scheme                                            Close Ended Scheme

 

1. Debt Fund                                                           1. Capital Protection Fund

2. Equity Fund                                                        2. Fixed Maturity Plan

3. Liquid Fund

4. Balance Fund

 

Open-Ended Scheme

 

Most of this is invested in this type of fund because investors can buy or sell their units at any time. There are few Mutual Funds in an open-ended scheme that require time constraint. There are also several types of Open-Ended Scheme which are given below

·         Debt Fund

·         Equity Fund

·         Liquid fund

·         Balance fund

 

Debt Fund:

Such a mutual fund when a government bond comes out or is given as a loan to a private sector. This reduces the risk of risk even if the returns are low.

Equity Fund:

People like to take this kind of  Fund because it is expected to get good returns. But in a short time, you will not be able to earn good returns from it because this type of Mutual Fund gives good returns in the long term.

this kind of company invests money from Equity Fund directly into the share market. Many stock market experts have an accurate idea of ​​which company will earn profit and which company will lose. These companies do not invest all your money in one company but invests in small companies in small parts so that even if one company goes into loss, all your money is not lost.

Types of mutual fund

Liquid fund:

It almost falls under the category of Debt Fund and its money is spent in the Short Market Instrument for a very short period. These are often for 3 to 6 months and in this, you can withdraw your money whenever you want. This gives a little more savings than the savings account, which is around 7%.

Liquid Fund is very popular among people and the reason is to give good returns in a short time. Which cannot be found in a savings account, because here you can get only 3 to 4% interest? Liquid Fund money is always invested in a small market cap and is largely safe.

Balance fund:

This type of Mutual Fundis considered quite safe as it is invested by balancing the money. They invest half of their money in a stock market and half of their money in Debt Fund. That is why it is called Balance Fund. Here half the money cannot be spoken because companies invest your money in a very balanced way in the stock market and elsewhere so that you get good returns.

Apart from this, there are many types of Mutual Fund which are based on Market Capitalization. Now in this, you have to research which Mutual Fund will be right for you which can give you good returns.

 

Close Ended Scheme

You cannot always invest in it under this scheme of Mutual Fund because you can invest in it only when NFO means New Fund Offer is issued. NFO is issued only a few days before and you have to invest during this period. In the Close Ended Scheme, a maturity date is determined and you cannot withdraw your money before the maturity date.

These are also of two types - 1. Capital Protection Fund 2. Fixed Maturity Plan

There is a lot of pressure to protect the amount invested in the Capital Protection Fund and it is invested more in fixed income securities. It remains open for a fixed period only. Apart from this, in the fixed maturity plan, it is already decided that the money is to be invested and how long its maturity will last. It is invested in Debt Instruments.

 

Why should you invest in Mutual Fund?

If you have extra income from your daily needs then you should invest in mutual funds as you can get an interest of 3 to 5% in a savings account and 8% in FD. And in Mutual Fund you can get 12 to 18% returns. Apart from this, you can also start at Rs 500 in Mutual Fund.

 

Those who are not experts in the stock market should invest in this itself. It is also considered as an option of the stock market because more and more money of this Fund is invested in the stock market itself. It is better to invest in Mutual Fund for the long term as it is difficult to earn more returns in a short time.

 

How to make money with Mutual Fund?

How to make money with mutual fund

By the way, earning money from Mutual Fund is considered easy in a way because the risk is very less in it. Apart from this, investing in a share market can be quite risky. You can invest up to Rs. 500 in this and can withdraw your money at any time.

There are many companies from which you can take mutual funds or you can buy them when an NFO is issued. Invest less money in the beginning and as your money gets made, you invest the same money again. With this, you will be able to earn good returns. Apart from this, you can also know the information of Mutual Fund in Hindi from many mutual fund companies.

 

How do Mutual Funds work?

As we have already known above, that a company with Mutual Fund takes money from investors and invests in the stock market, securities bonds, and small market cap. Whatever returns they get from your money in Mutual Fund, a commission of 2 - 3% is given to you after deducting it.

Overall, more and more of its money also goes to the stock market because from here they hope to get maximum returns. It has many financial experts who understand how to buy the right stock. And they will always try to invest in a good company so that they and you also get a good income.

 

Conclusion

Friends, I hope that you have liked this article about Mutual Fund. In this, I have tried to tell you every information related to it. Even if you do not know about this at all, this article will be very helpful for you. In this, Mutual Fund has been covered from the beginning and a lot of end items have also been told.

If there is still any suggestion related to this post, then do let me know by commenting. Share this post with all your friends so that all your friends can know what is Mutual Fund, how many types are there, and how to invest in it.