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How to start investing in Mutual Fund?

Investing in Mutual Funds is like planting a tree. At first, it might feel like a small seed just a modest SIP or a lump-sum amount. But over time, with a little patience and care, that seed can grow into something powerful, offering you the shade and fruits of financial freedom. 

In India, Mutual Funds are the secret ingredient. Many have used it to turn modest savings into wealth. They let you dip your toes into the vast ocean of stocks, bonds, and securities, with professional managers navigating the waters for you. You don’t need to be a stock market expert you need to trust the process and take that first step. In this blog, we will see the detailed process of how to start investing in Mutual Funds.

• Steps Involved in  starting a Mutual Fund investment:

• Select the best type of Mutual fund:

There are various types of Mutual Funds available in the market. Some important are:

1.  Equity Fund: The fund manager invests money into the equity market.

1.  Debt Fund: It is known as a fixed income fund. Money is invested into bonds or securities etc.

1.  Hybrid Fund: It is a combination of equity fund and debt fund. Money is invested in both funds.

1.  Index fund: In this fund return on investment depends on the performance of the fund.

• Research:

According to your risk-taking abilities, research all available funds, and understand the future circumstances linked with the fund. 

• Risk and Return:

Understand the risk-reward potential of the fund. Check the historical performance of the fund. If you consider an Equity Mutual Fund, then prioritise the fund on our risk capacity. For example, large-cap funds are low-risk low return funds and small-cap are high-risk high return funds.

• Select the best Mutual Fund platform:

In the market, various asset management companies manage Mutual Funds. You can start your investment journey directly with AMC or other mutual fund distributer. All the process  can be completed online or offline.

Before starting an investment, you need to complete the e-KYC process on the AMC website.

Adharcard, photograph and PAN  card are the important needed to complete the KYC process. Every asset management company provide a technical platform for all the processes.

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• Decide the best investment mode:

1. SIP: systematic investment plan makes investment accessible and affordable. In India, most companies have given the option to start investment with just 500  rupees, but it can vary with the type of fund.

1. Lumpsum: Through the lumpsum plan, investors can invest money in large amounts at a single time.

• Conclusion:

Selecting the best Mutual Fund is not only a financial decision. It is a wealth-creating and dream-fulfilling process. In a country like India Mutual Fund industry has tremendous potential to grow. Also, asset management companies offer various funds for investment. Due to the role of the fund manager, it becomes a great choice for new investors. But before starting an investment, it is important to check the history and vision of the fund.

1.  How to start investing in Mutual Fund India?

Ans: Open an account directly with the asset management companies and or with a Mutual Fund distributor. Complete the KYC  process and start your investment journey within a few minutes.

1.  How do I choose the best Mutual Fund in India? 

Ans: Finalise your investment goal, and which fund you want to invest in, see the past performance of the fund, and check the management decision-making and transparency of the fund.

1.  What is the document required for Mutual Fund investment?

Ans: Adharcard, PAN card, photograph, and bank account are primary documents required for starting a mutual fund investment.

1.  What is the right time to invest in a Mutual Fund?

Ans: Investors consider various factors before investing. But generally, investors prefer a market that gives correction and shows future growth. 

1.  How do I track my Mutual Fund investment?

Ans: You can track your investment on your AMC website or your mutual fund distributor website.

1.  Which type of tax implications are applicable in India?

Ans: Long-term capital tax and short-term capital tax are the important taxes levied by the government. Also, the government charges taxes on dividends received on investments as per the income tax slab. All these taxes can vary in every financial year. 

1.  Can I invest in a Mutual Fund online?

Ans: yes you can invest in Mutual Funds online through the AMC website or Mutual Fund distributor website or app.

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