Mutual Funds of India – A Great Online Investment Opportunity.!

In order to have an overview of Indian mutual funds you need know what mutual funds actually are all about. Mutual funds are a pool of money that is collated by a group of investors keeping investment in mind. Now there is a need to keep a manager who can manage the funds. This manager of funds then invests the money according to the market changes. They are considered as the best possible mode of investment. They are a trusted way and many people it over any other kind of investment.

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v       The types of Mutual Funds in India:

There are three types of mutual funds which are:

1. Open ended funds are mutual funds which have liquidity as the main characteristic. They are not liable for a fixed maturity. However you cannot withdraw your funds outside the stipulated time span that you have enrolled in.

2. Close ended mutual funds on the other hand have a fixed maturity time. You can invest at one go. That means you need to pay the premium as per any stipulated time.

3. Interval scheme funds are a combination of both the open ended and close ended funds.

v       The difference

The difference between shares and mutual funds lies in the fact that shares are taxable while mutual funds have tax rebates. In addition to this shares are do-it-yourself investment while you need to have a fund manager for a mutual fund.

Mutual funds have a premium in contrast to shares which do not need one. Your investment in shares brings home the dividend much contrary to the mutual funds which bring home the interests. The most important requirement for share trading is to maintain a Demat Account but mutual funds have no such requirements.

v       The advantages

The biggest advantage of mutual funds is that they are maintained by hardcore professionals. So they will not misguide you. You can diversify your investment and thus the risk to some extent can be reduced. You can simply invest in small amounts while investing in mutual funds.

v       The disadvantages

The disadvantages of mutual funds is that since they are managed by professionals they are little expensive. You need to trust the fund manager for this completely and depend on his decisions.

Sometimes situations may go against that and you may think that you lost your hard money because of someone else. Again usually when you have good returns from a previous it is observed that the manager has problems investing it again. In addition to all this the fund manager never thinks of your personal taxation.

v       The research

To get an overview of Indian mutual funds you need to research well. You can do this either by reading a lot in the magazines, newspapers or online. In fact the internet can give all the updated information on mutual funds and the best of the investment houses.

It is advisable that you invest your money with all the background check and proper research. This way you can get maximum returns out of your investment. This is how you can get all the relevant information and work accordingly.

Apart from all the above mentioned points there are some more to be added in favor of mutual funds. They are like mutual funds are a tax saver. You get rebate on taxation under Section 88 of Income Tax Act.

Mutual funds also have sector specific investment schemes. Like you can invest in Petroleum stocks or Software, the choice is yours. It is just that as investor you need to keep an eye on them. So this was so far the overview of Indian mutual funds.