FAQ

A mutual fund is a financial vehicle that invests money from multiple investors to invest in securities like stocks, bonds, and other assets. The fund is managed by professional fund managers who allocate the funds to generate returns.

Unlike savings accounts or fixed deposits, mutual funds have the potential to offer higher returns over the long term by investing in a diversified portfolio of assets. While bank deposits are safer, mutual funds can help grow your wealth faster, helping you achieve your financial goals.

Mutual funds are regulated by SEBI (Securities and Exchange Board of India) and come with various risk levels depending on the fund type. However, investing in a well-researched, diversified mutual fund can help manage and reduce risk.

• Mutual Funds: Mutual funds are regulated investment vehicles managed by professionals, offering diversification, transparency, and potential for long-term wealth creation. They are suitable for investors who want to grow their wealth steadily over time while managing risk through a diversified portfolio.
• Chit Funds: Chit funds are a type of informal savings scheme where members contribute to a common pool, from which they can borrow money through an auction process. While chit funds can provide short-term liquidity, they carry higher risks due to lack of regulation and potential mismanagement. Chit funds are generally not suitable for long-term wealth creation and may lack the safety and professionalism offered by mutual funds.

No, mutual funds are not gambling. They are structured investment vehicles managed by professionals. While there are risks involved, they are calculated and managed through diversification and research.

A SIP (Systematic Investment Plan) allows you to invest a fixed amount of money regularly (e.g., monthly) into a mutual fund. It helps you build wealth gradually by averaging out the cost of investment over time, reducing the impact of market volatility. SIPs are ideal for long-term financial goals and are a disciplined approach to investing, making it easier to start with small amounts and increase your investment as your income grows.

A SWP, or Systematic Withdrawal Plan, is a facility that allows you to withdraw a fixed amount of money from your mutual fund investment at regular intervals, such as monthly, quarterly, or annually. It provides a steady income stream by redeeming units of your mutual fund investment systematically. SWPs are often used by retirees or those seeking a regular income from their investments while still keeping the remainder of the investment in the market to potentially earn returns.

A Step-Up SIP is an investment plan where you start with a fixed amount of investment, but increase the contribution periodically by a specified percentage or amount. For example, you might start with a monthly SIP of Rs. 10,000 and increase it by 10% every year. This approach helps you invest more as your income grows or inflation affects your financial goals, enabling you to potentially build a larger corpus over time. Step-Up SIPs are designed to help investors gradually increase their investments in line with their financial growth and goals.

You can start investing in mutual funds with as little as Rs. 100 per month through a Systematic Investment Plan (SIP). But to achieve your goals and retirement planning we recommend you to start your SIP from Rs 2000. There is no upper limit to how much you can invest.

A lump sum investment is when you invest a large amount of money in one go into a mutual fund, rather than spreading the investment over time through SIPs. Lump sum investments can be beneficial if you have a significant amount of money available and want to invest it immediately to potentially benefit from market growth. However, the timing of the investment can impact returns, so it's essential to consider market conditions or consult a financial advisor before making a lump sum investment.

Choosing the right mutual fund depends on your financial goals, risk tolerance, and investment horizon. As mutual fund distributors and advisors, we conduct in-depth research from over 2,500 schemes to recommend the best options tailored to your needs.

SIP is a method of investing in mutual funds where you invest a fixed amount regularly (monthly, quarterly, etc.). It helps in averaging out the cost and reduces the impact of market volatility.

The investment amount is decided based on your financial goals, current financial situation, and the time frame to achieve your goals. We conduct a financial health check to help you determine the ideal investment amount.

• Equity Mutual Funds invest primarily in stocks and are designed for investors seeking higher returns and willing to take on higher risk. They are ideal for long-term goals and can offer significant growth potential.
• Debt Mutual Funds invest in fixed-income securities like bonds, government securities, and treasury bills. They are generally less risky and provide more stable, though lower, returns. Debt funds are suitable for conservative investors or those looking for short- to medium-term goals.
• Hybrid Mutual Funds combine both equity and debt investments, offering a balanced approach. They provide a mix of growth and stability, making them suitable for investors looking for moderate risk and returns. Hybrid funds are ideal for those who want diversification within a single fund.

Yes, you can switch between mutual funds depending on changes in your financial goals, risk appetite, or market conditions. However, it's essential to consider exit loads, taxes, and the performance of the new fund before switching.

It's advisable to review your mutual fund portfolio at least once a year or when there are significant changes in your life or financial goals.

• Short-Term Capital Gains (STCG): If you sell your mutual fund units within a year of purchasing them, you'll now pay a 20% tax on the profits, up from the previous rate of 15%. For example, if you made a profit of Rs. 10,000 on a mutual fund held for 6 months, your tax liability would be Rs. 2,000, compared to the earlier Rs. 1,500.
• Long-Term Capital Gains (LTCG): For mutual fund units held for more than a year, the tax on profits has increased from 10% to 12.5%. This means that while the increase is slight, investors will need to account for this higher tax rate when planning their long-term investments.

Yes, mutual funds in India are regulated by SEBI (Securities and Exchange Board of India), ensuring transparency and protecting investors' interests.

Yes, switching between mutual funds is considered a sale, and you may be liable for capital gains tax depending on the type of fund and the holding period.

Returns from mutual funds vary depending on the type of fund and market conditions. Equity funds may offer higher returns but come with higher risks, while debt funds offer more stable but stable returns.

Mutual fund returns are calculated based on the Net Asset Value (NAV) of the fund. The NAV reflects the market value of the fund’s assets after deducting liabilities.

Investing in mutual funds is often considered better for individual investors than buying stocks for several reasons:

• Diversification: Mutual funds invest in a broad range of securities, spreading risk across various assets. This reduces the impact of poor performance by any single stock.
• Professional Management: Mutual funds are managed by experienced fund managers who conduct in-depth research and make informed investment decisions on your behalf.
• Convenience: Mutual funds require less time and effort compared to researching and managing a portfolio of individual stocks. You can start with a small amount and benefit from professional expertise.
• Lower Risk: Since mutual funds spread investments across multiple assets, they tend to be less volatile than individual stocks, making them suitable for investors with varying risk appetites.
• Systematic Investment Options: Mutual funds offer options like SIPs, allowing you to invest regularly and benefit from rupee cost averaging, which is not possible when buying individual stocks.

You can redeem your mutual fund investments by submitting a redemption request through your mutual fund distributor or online platform. The amount will be credited to your bank account within a few working days.(T+2)

Yes, you can pause your SIP for a specified period without incurring any penalty. You can resume it later when you are ready.

An exit load is a fee charged by the mutual fund if you exit (redeem units) before a specified period. It’s usually a percentage of the NAV and is intended to discourage short-term trading.

Most mutual funds do not have a lock-in period, except for specific funds like ELSS (Equity Linked Savings Scheme), which has a mandatory 3-year lock-in for tax benefits.

Yes, some banks offer loans against your mutual fund units, allowing you to access liquidity without selling your investments.

You can track your mutual fund investments through your distributor’s platform and on your monthly CAS statements. 

Mutual funds have an expense ratio, which is a percentage of the assets under management. This fee covers the fund's operating costs, including management fees.

The expense ratio is the annual fee that mutual funds charge their investors to cover the costs of managing the fund. It includes management fees, administrative expenses, and other operational costs. The expense ratio is expressed as a percentage of the fund's average assets under management (AUM). A lower expense ratio means more of your money is invested in the market, potentially leading to higher returns. It's essential to consider the expense ratio when choosing a mutual fund, as it can impact your overall returns over time.