{"id":1517,"date":"2023-02-18T07:10:13","date_gmt":"2023-02-18T07:10:13","guid":{"rendered":"https:\/\/uat1.gettogetherfinance.com\/blog\/?p=1517"},"modified":"2025-10-10T17:31:19","modified_gmt":"2025-10-10T12:01:19","slug":"mutual-funds","status":"publish","type":"post","link":"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/","title":{"rendered":"What are Mutual Funds? 10 Best Advantages of Mutual Funds"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/advantages-of-mutual-funds.webp\" alt=\"advantages of mutual funds\" class=\"wp-image-2163\"\/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#What_are_mutual_funds\" title=\"What are mutual funds?\">What are mutual funds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#1_Beneficial_for_a_novice\" title=\"1. Beneficial for a novice\">1. Beneficial for a novice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#2_Advantage_of_scale_and_diversity\" title=\"2. Advantage of scale and diversity\">2. Advantage of scale and diversity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#How_are_mutual_funds_are_operated\" title=\"How are mutual funds are operated?\">How are mutual funds are operated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Types_of_Mutual_Funds\" title=\"Types of Mutual Funds:\">Types of Mutual Funds:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Equity_Funds\" title=\"Equity Funds:\">Equity Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Debt_Funds\" title=\"Debt Funds:\">Debt Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Hybrid_Funds\" title=\"Hybrid Funds:\">Hybrid Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Bond_Funds\" title=\"Bond Funds:\">Bond Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Dividend_Funds\" title=\"Dividend Funds:\">Dividend Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Tax_saving_Funds\" title=\"Tax saving Funds:\">Tax saving Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Index_Funds\" title=\"Index Funds:\">Index Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Income_Funds\" title=\"Income Funds:\">Income Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Money_Market_Funds\" title=\"Money Market Funds:\">Money Market Funds:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Exchange_Traded_Funds\" title=\"Exchange Traded Funds:\">Exchange Traded Funds:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#How_should_one_select_the_mutual_fund\" title=\"How should one select the mutual fund?\">How should one select the mutual fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#What_are_the_advantages_of_mutual_funds\" title=\"What are the advantages of mutual funds?\">What are the advantages of mutual funds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#1_Low_cost\" title=\"1. Low cost\">1. Low cost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#2_Easy_to_invest\" title=\"2. Easy to invest\">2. Easy to invest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#3_Highly_regulated_and_transparent\" title=\"3. Highly regulated and transparent\">3. Highly regulated and transparent<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#4_Professional_management_-_saves_time_costs_and_reduces_risk\" title=\"4. Professional management:- saves time, costs and reduces risk\">4. Professional management:- saves time, costs and reduces risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#5_Diversification_-_to_protect_from_downside_risk\" title=\"5. Diversification:- to protect from downside risk\">5. Diversification:- to protect from downside risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#6_Tax_saving\" title=\"6. Tax saving\">6. Tax saving<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#7_Liquidity\" title=\"7. Liquidity\">7. Liquidity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#What_are_ways_one_can_invest_in_mutual_funds\" title=\"What are ways one can invest in mutual funds?\">What are ways one can invest in mutual funds?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#1_Direct_investment\" title=\"1. Direct investment\">1. Direct investment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#2_Online_Mutual_Fund_investment_platforms\" title=\"2. Online Mutual Fund investment platforms\">2. Online Mutual Fund investment platforms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#3_Using_a_DEMAT_account\" title=\"3. Using a DEMAT account\">3. Using a DEMAT account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#4_Mutual_Fund_agents\" title=\"4. Mutual Fund agents\">4. Mutual Fund agents<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/mutual-funds\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_mutual_funds\"><\/span>What are mutual funds? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When we are up to mutual funds we have a lot of questions at the same time about how to invest in it and when to invest in it.&nbsp;<\/p>\n\n\n\n<p>Mutual fund, as the name suggests, is a fund which is owned by a company and managed by a fund manager. People put their money in these funds and the fund manager pools all the money and invest it in stocks, <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/what-is-bond-yield\/\" target=\"_blank\" rel=\"noreferrer noopener\">bonds <\/a>or some short term debt funds. There are 2 main reasons why mutual funds are formed:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Beneficial_for_a_novice\"><\/span>1. Beneficial for a novice <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When some one knows not much about markets, or investing, it\u2019s very difficult to manage the money. He\/she wouldn\u2019t know how to trade stocks, or how to invest for a long term. So, for these people, a simple way is just to give their money to someone else who can manage it properly and help you grow your money.&nbsp;<\/p>\n\n\n\n<p>But, you can not give all your life\u2019s savings just to anyone. What if the person you gave money to ran away with it?? That\u2019s why mutual funds are set up so that you can put your money into funds and the fund managers can manage it.&nbsp;Since, funds are managed by AMC, and AMCs are monitored by trusts, your money is safe. Plus these fund managers are intelligent, keeping track of markets and all the economic activities, they are very much qualified to manage your money.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Advantage_of_scale_and_diversity\"><\/span>2. Advantage of scale and diversity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Suppose you only have Rupees 2,000 with you, and you want to invest it in a stock, which costs around Rupees 4,000? You just cannot buy half-stock, and you don\u2019t have enough money to buy a single share.\u00a0Or you want to <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/portfolio-diversification\/\" target=\"_blank\" rel=\"noreferrer noopener\">diversify your portfolio <\/a>to reduce market risk, but you cannot buy 10 different stocks with that amount. So what will you do? You put your money into a Fund, similarly, other people also invest their money into the fund, and the whole amount is pooled at one place and it can be invested in some stocks or bonds. It can also be diversified across multiple stocks or bonds to reduce the risk.\u00a0that is why the mutual funds are formed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_mutual_funds_are_operated\"><\/span>How are mutual funds are operated?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mutual fund is the pool of money invested by the people in a particular fund. Fund managers are liable to manage the amount by investing them in securities to get the best returns out of it. Fund managers are well educated and well aware about the market conditions and economic activities that is why they can be trusted by people. people with a capital of 500 rupees can also start investing in mutual funds, now you must be thinking how?<\/p>\n\n\n\n<p>let&#8217;s understand this by an example:-<\/p>\n\n\n\n<p>Suppose there is a total corpus of Rupees 1 crore (total corpus also known as AUM). So, what the AMC will do is, they will divide the 1 crore into small parts of Rupees 50 each, so it becomes 2 lakh parts in total. Now this 50 rupees will be the initial <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/net-asset-value\/\" target=\"_blank\" rel=\"noreferrer noopener\">NAV <\/a>of the Fund, at which you or any other person can just buy the units from the AMC. So, if you have 2000 rupees, you can get 40 units. The AMC will then pool the money collected and invest it. This money will be invested in securities in expectation of generating a good returns out of them. So suppose, the current value increased to 1.2 crore rupees, Since there were 2 lakh units, the NAV will now be Rupees 1.2 crore divided by 2 lakh units, i.e. 60 rupees. That means the Rs.2000 you invested at Rupees 50 has now become 60 Rupees and your total investment becomes 2400 now. Similar would be the effect if the value of the total corpus fall.\u00a0<\/p>\n\n\n\n<p>this is How mutual fund works.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Mutual_Funds\"><\/span>Types of Mutual Funds:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/types-of-mutual-funds.webp\" alt=\"types of mutual funds\" class=\"wp-image-2164\"\/><\/figure>\n\n\n\n<p>Primarily 3 different types of Funds are there:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Equity_Funds\"><\/span>Equity Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds are also known as stock funds. And as the name suggests these are the funds that are invested in stocks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Debt_Funds\"><\/span>Debt Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds are the type of investment that are invested in government, corporate debt. It is the best way to gain exposure to a variety of security and to generate a fixed income.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hybrid_Funds\"><\/span>Hybrid Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Hybrid funds are also known as balanced funds. These types of funds are equally distributed in equities and debt. The very main objective of this fund is to have regular income with reasonable profit at the same time.<\/p>\n\n\n\n<p><strong>Some more Mutual Funds are listed below:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bond_Funds\"><\/span>Bond Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investments with a fixed rate of return, such as corporate bonds, <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/government-sovereign-bonds\/\" target=\"_blank\" rel=\"noreferrer noopener\">government bonds<\/a>, or other debt instruments, are the primary focus of a Bond Fund. The shareholders receive interest income from the portfolio of the fund. These funds are frequently &amp; actively managed to acquire bonds that are relatively undervalued in order to sell them at a good profit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Dividend_Funds\"><\/span>Dividend Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds consists of stocks which provide high and regular <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/best-dividend-paying-stocks-in-india\/\" target=\"_blank\" rel=\"noreferrer noopener\">dividends<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_saving_Funds\"><\/span>Tax saving Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>these funds are designed in such a way that they give tax benefits to the people. These are also known as equity linked saving schemes(ELSS).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Index_Funds\"><\/span>Index Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These funds are the type of funds that invest in the major market <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/index-funds\/\" target=\"_blank\" rel=\"noreferrer noopener\">index<\/a> such as Nifty or Bank Nifty.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_Funds\"><\/span>Income Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These types of funds are generally made for the cash flow to the investors. Investors are generally retirees who want a stable income. In income funds we invest in government and high quality debt only.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Money_Market_Funds\"><\/span>Money Market Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Money market funds are also known as treasury bills. These are the risk free funds and for a short period of time which provides a decent profit to the investor.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exchange_Traded_Funds\"><\/span>Exchange Traded Funds:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These are generally not considered as mutual funds but they employ strategies that consist of mutual funds. People generally sell ETFs on the same trading day so it can be considered as short term investment also<strong>.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_should_one_select_the_mutual_fund\"><\/span>How should one select the mutual fund?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before you select the mutual fund, you need to shortlist the mutual fund category. The very first step is to identify the financial goal with the duration and the expected amount of the target. We don\u2019t know if the market will rise or fall in the short term. For any short-term financial goal, it is better to invest in short-term debt funds. <\/p>\n\n\n\n<p>Always build an emergency fund by investing in liquid funds to take care of unexpected expenses.&nbsp;One needs to stay updated with economic activities at the national and international levels. The more you learn and understand about mutual funds, the more confident you become with your investment.<\/p>\n\n\n\n<p><strong>Also Read<\/strong>: <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/step-up-sip\/\" target=\"_blank\" rel=\"noreferrer noopener\">Step Up SIP<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_advantages_of_mutual_funds\"><\/span>What are the advantages of mutual funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-content\/uploads\/2023\/02\/mutual-funds.webp\" alt=\"advantages of mutual funds\" class=\"wp-image-2165\"\/><\/figure>\n\n\n\n<p>There are many advantages of mutual funds, some of them are listed below:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Low_cost\"><\/span>1. Low cost<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Mutual funds are preferred because of their low costs due to economic scale, that is why it becomes a bit easy to invest in them and it is beneficial for the people who have a little less capital.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Easy_to_invest\"><\/span>2. Easy to invest<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investments can be made in lump sum or periodic payments (easy on the pocket) through <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/investment-in-mutual-funds-sip\/\" target=\"_blank\" rel=\"noreferrer noopener\">Systematic investment plan <\/a>( SIP ). One can start an SIP with as less as 500 rupees. Mutual funds are easy to buy and sell. That is why it is considered easily accessible to all investors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Highly_regulated_and_transparent\"><\/span>3. Highly regulated and transparent<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The mutual fund industry in India is very well regulated and transparent. It is closely monitored and regulated by Securities Exchange Board of India ( <a href=\"https:\/\/www.sebi.gov.in\/\" target=\"_blank\" rel=\"noreferrer noopener\">SEBI <\/a>).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Professional_management_-_saves_time_costs_and_reduces_risk\"><\/span>4. Professional management:- saves time, costs and reduces risk<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While investing in mutual funds, you don&#8217;t need to monitor the market because AMC&#8217;s are doing it for you and it gives you a leverage of time and cost both.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Diversification_-_to_protect_from_downside_risk\"><\/span>5. Diversification:- to protect from downside risk<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Mutual funds are always diversified ( invested in different sectors ) so one is always at low risk. Your <a href=\"https:\/\/uat1.gettogetherfinance.com\/blog\/portfolio-diversification\/\" target=\"_blank\" rel=\"noreferrer noopener\">portfolio <\/a>is diversified in such a way that it will cause minimal risk to your investments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Tax_saving\"><\/span>6. Tax saving<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There are tax saving funds under ELSS. Under section 80C of the Income Tax Act, you can have a deduction of a maximum of Rupees 1,50,000 a year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Liquidity\"><\/span>7. Liquidity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Mutual funds are very liquid as compared to other investment schemes, they can be sold at any time during market hours.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_ways_one_can_invest_in_mutual_funds\"><\/span>What are ways one can invest in mutual funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are several ways to invest in mutual funds, some of them are listed bellow:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Direct_investment\"><\/span>1. Direct investment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can\u00a0invest in Mutual Funds\u00a0by submitting an application form along with a Cheque or bank draft at the branch office or designated Investor Service Center (ISC) of Mutual Funds or Registrar &amp; Transfer Agents of the respective the Mutual Funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Online_Mutual_Fund_investment_platforms\"><\/span>2. Online Mutual Fund investment platforms<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can also choose to invest online through the websites of the respective&nbsp;<strong>Mutual Funds<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Using_a_DEMAT_account\"><\/span>3. Using a DEMAT account<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One can use existing DEMAT account and bank account for transacting in mutual funds. All you need to do is log in to your DEMAT account and look for mutual fund investment options.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Mutual_Fund_agents\"><\/span>4. Mutual Fund agents<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investment in Mutual funds can be done by the agents or brokers. It can be suitable for the ones who do not have a DEMAT account or Net banking.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mutual Funds are a pool of money which can be invested in securities by the experts and it can generate a consistent return to the investor. Mutual funds are beneficial to all the people who wish to enter the market but don&#8217;t know how to do it. People who are having no knowledge about the stock market and securities can also benefit from these funds because they are managed by professionals and they are one of the most liquid forms of investment one can make. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are mutual funds? When we are up to mutual funds we have a lot of questions at the same time about how to invest in it and when to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":8239,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63],"tags":[64],"class_list":["post-1517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds","tag-mutual-funds"],"acf":[],"_links":{"self":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/comments?post=1517"}],"version-history":[{"count":6,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517\/revisions"}],"predecessor-version":[{"id":8240,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/posts\/1517\/revisions\/8240"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media\/8239"}],"wp:attachment":[{"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/media?parent=1517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/categories?post=1517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/uat1.gettogetherfinance.com\/blog\/wp-json\/wp\/v2\/tags?post=1517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}