These days the number of people investing in mutual funds has increased. People have been attracted towards it because of the high returns in it as compared to other schemes. Although there are many types of mutual funds, but in terms of security, investing through SIP is considered to be the best. Since it gives the benefit of compounding interest, the money grows rapidly. Generally, mutual funds give an estimated return of 10 to 12 percent.
If you invest through SIP, then the risk is less. In this, you can add lakhs of rupees by investing a little money. If you invest even only 1500 rupees every month, then through this you can create a fund of up to 53 lakhs in 30 years. Similarly, if you invest only Rs 500, then do it for 30 years, then according to the mutual fund calculator, a fund of more than Rs 17.5 lakh will be ready. This will be more beneficial than FD or other schemes.
Process of investing in mutual funds
There are many types of mutual funds. But investing through SIP is considered the safest. When you take a mutual fund, you have to keep investing continuously, it should not stop. Apart from this, if you are going to invest in more than one SIP, then do not invest in schemes of the same fund house, but invest in different fund houses. The money received in equity mutual funds is invested in the stock market. On this the returns are based.
How to choose mutual fund
Choose a mutual fund keeping in mind the purpose for which you want to invest in mutual funds. Equity mutual funds are beneficial if you want to make long term investments. On the other hand, debt funds or liquid funds are better for short-term investments.
Record previous check
While choosing any mutual fund, it is important to have information about its past records. With this, you would know the history of the company and the performance record of the fund. With this, you will be able to know up to what percentage of returns the fund has given in the past. You can also take the help of ratings given to these funds by different rating agencies for mutual fund selection.
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