Why to Invest in Mutual Funds?

There’s no denying that investing is key to achieve your financial goals. But with plenty of options in the market, things can quickly get puzzling for you. From stocks to bonds, gold to fixed deposits, government-backed schemes to a mix of all these, each one comes with its own pros and cons.

Having said that, a mutual fund(MF) is a great investment avenue that is ideal for most people. It offers you a host of benefits while helping you grow your wealth. In this article, we narrow down some of the most solid reasons why to invest in mutual funds.

Professional management

Buying individual stocks requires significant time and resources. But with MFs, you don’t need the knowledge or skills to constantly oversee your investments. Qualified fund managers will do it for you instead.

These professionals allocate the assets under management (AUM), time the entry/exit, and make investment decisions backed by proper research. Thus, MFs are ideal for you even if you are a novice investor.

Invest with ease

There is no compulsion to infuse a significant amount of money into a mutual fund.You can deposit as little as Rs. 100 in some schemes to get started.

Moreover, you can invest periodically using a Systematic Investment Plan (SIP). Or make a lump-sum investment if you have extra funds lying around. You can make things a lot easier by enabling automatic bank debits for timely investment in SIPs.

Additional Read: What is the Best Time to Invest in Mutual Funds?

Diversify your financial portfolio

One of the foremost reasons to invest in MFs is built-in diversification. Instead of focusing on one kind of securities, these funds hold a variety of assets including shares, bonds, government securities, etc.

For instance, some part of the investment may consist of equity for long-term growth. And the other fixed-income instruments for alleviating risk. Also, one type of security compensates for the losses due to the underperformance of other ones.

Save taxes

The next time you ask this to yourself – ‘Why should I invest in mutual funds?’ – Just remember that they can help you save taxes. An Equity-Linked Saving Scheme (ELSS) offers tax deductions of up to Rs. 1.5 lakhs under section 80C of the Income Tax Act, 1961.

A broad range of schemes to choose from

MFs come in different variants including debt, equity and hybrid funds. These categories have further sub-divisions like stock funds, money market funds, hybrid funds, sectoral funds, etc. Whatever be your risk profile and investment objective, there is an MF that ideally caters to your needs.

Additional Read: How Do I Invest in Mutual Fund with Moneyfy?

Want to invest in MFs? Start today with Tata Capital’s Moneyfy app

There is no dearth of reasons to invest in MFs. In case you are looking for a platform to start your investments, try Tata Capital’s Moneyfyapp for free. It’s a one-stop online solution for all your money management needs.

We let you choose a mutual fund that aligns with your investment horizon, risk appetite and goals. Moreover, you can compare schemes based on their portfolio, ratings, past returns, risk grade, and more. So, why wait? Download the app and take one step closer to achieving your financial goals!