July 24, 2024

Have you covered your investment plans? If not, Mutual Funds are the way to go about it as it helps in risk diversification of your investments that are distributed among securities, equity, debt and gold, keeping your eggs in different baskets.

Best mutual funds enable customers to invest according to their risk appetite, depending on whether they want to accumulate their capital long-term, seek tax benefits (tax-saver mutual funds) or want better interest rates than banks.

What are mutual funds?

These financial instruments put together shareholders’ assets to invest in different vehicles like stocks, bonds and other money market instruments. They give investors access to professionally managed risk portfolios.

They charge annual fees, expense ratios, or commissions, which might affect their overall returns. The participation rate of each shareholder is proportional to their portfolio share.

What is the benefit of choosing the top mutual funds performer?

  • Tax saving

Tax saver mutual funds like Equity Linked Saving Scheme(ELSS) help you gain high returns along with giving tax benefits. It is a tax-saving mutual fund plan that can exempt taxes up to Rs.1.5 lakhs.

  • Diversification

It allows you to keep your eggs in different baskets by enabling you to diversify your funds as they are invested across sectors, industries and companies of varied capital sizes. Each asset is segregated based on market volatility, thus sharing the risk factor.

  • High liquidity

Mutual funds are relatively more liquid than other investment options, as you can withdraw funds when you feel like it, except for those with a lock-in period like ELSS. There might be a pre-exit penalty for some funds, though.

  • Flexibility

You are free to invest whichever way possible, either by making a lump-sum payment or opting for a Systematic Investment Plan (SIP), making it a flexible investment instrument. The best mutual funds for SIP are the State Bank of India, Quant Active Fund, Axis Fund, etc.

  • Transparency

They are highly transparent as SEBI lays down all the rules and norms and is its regulator. The Association of Mutual Funds in India(AMFI) is a self-regulatory body under the purview of SEBI that looks after ethical and professional standards.

Which is the best mutual funds app to invest in?

The best mutual funds are Axis funds, HDFC funds, Kotak Equity Opportunities Fund, etc., and you can invest in all of these through the Bajaj Finserv app. This app allows you to be liquid and diversify your investments conveniently and quickly.

It is transparent and accessible as well and provides tax benefits to the customers, professionally managing your assets and providing more than 1200 schemes for you to choose from the best mutual funds. This app is, without a doubt, the best mutual fund in India!

So, you plan to invest and intend to get more than usual interest rates. In that case, mutual funds are the answer as they give high returns at a low cost of investments and diverse asset allocation irrespective of whether you are a seasoned, first time or an old investor.

Conclusion

Despite mutual funds being a rewarding investment choice, analyzing and seeing which plan suits you the most and fits your financial profile becomes crucial. Overall, mutual funds can be made a valuable part of the investment strategy. 

Tax saver mutual funds help to benefit as you get a tax return, but it becomes essential to make an informed decision so that the losses are minimized while maximizing the returns.

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