Since the onset of digitalisation, investing has become as easy as ordering groceries. Long gone are the days when people actually used to spend an entire day at banks understanding different investment plans. Now, certain mutual funds apps in India do everything for you and thanks to the easy availability of the internet, people are more knowledgeable than before.
To live a stable and financially secure life, it is essential to start investing timely in a very planned manner. Financial planning is all about taking a comprehensive look at your current financial situation and then constructing a plan to reach the desired goals.
What are mutual funds?
Mutual funds are an investment channel where many investors pool their money to earn returns on their capital over a specific period of time. Further, it is the responsibility of the fund manager to invest this corpus in different securities, such as stocks, bonds etc., and seek to provide potential returns to all the investors.
The corpus of funds is managed by a professional known as a fund manager or portfolio manager. However, the investors share the profit or loss on the investment collectively in proportion to their contribution to the fund.
What are the pros of investing in mutual funds?
To invest in mutual funds, it is very important to use genuine mutual funds apps in India. From cost-effectiveness to reducing tax liability, it has certain advantages.
Investing through mutual funds is relatively cost-effective. When you buy equity directly, you need to pay brokerage as well as STT (Securities Transaction Tax) costs. So, therefore, the larger the number of transactions, the higher the costs.
● Diversified Portfolio
Mutual funds invest in two asset classes – debt and equity. While some funds are pure debt, some invest in just equity, while others are hybrid or balanced. The benefit of mutual fund investment is exposure to various shares or fixed-income instruments.
● Invest in Small Amounts
You can begin a SIP (Systematic Investment Plan) even with Rs 500 a month. The pro here is that you don’t have to wait until you accumulate enough cash to make investments. Therefore, you’ll be able to make optimum use of available cash and maximise the returns.
● Reduce Tax Liability
Another reason mutual funds are worth investing in is that it helps you save on income tax. So if you invest in an ELSS (Equity Linked Savings Schemes) fund, you’ll be able to reduce your taxable income by as much as Rs 1.5 lakh. As per the law, this comes under Section 80C of the Income Tax Act 1961.
Be it a short-term or a long-term goal, when you invest via the best online mutual fund investment platform India, such as Bajaj Finserv, you are on your way to meeting your financial goals efficiently. Around six and a half months ago, I was planning to invest.
After thorough research, I went for some notable funds (I can’t mention the name of the funds) via the Bajaj Finserv application, one of the best investment apps india on my smartphone to sort out my daughter’s college education in the coming years.
Lastly, it is essential to remember that the entire process involves evaluating the current situation, identifying goals, and then developing and implementing relevant propositions.