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    • Home
    • Why PALEKARS
    • Knowledge Centre
    • All About Mutual Funds
    • Testimonials
    • About Us
    • Client Desk Login
    • Open E-Wealth Account
  • Home
  • Why PALEKARS
  • Knowledge Centre
  • All About Mutual Funds
  • Testimonials
  • About Us
  • Client Desk Login
  • Open E-Wealth Account

Testimonials

Testimonials

Testimonials

Testimonials

Testimonials

Testimonials

All About Mutual Funds

What Are Mutual Funds?

Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of securities, such as stocks, bonds, and other assets. Managed by professional fund managers, mutual funds offer a way to invest in a wide range of securities, spreading risk and potentially achieving higher returns compared to traditional savings instruments.

Benefits of Investing in Mutual Funds

  • Diversification: Mutual funds invest in a mix of assets, reducing the risk associated with investing in individual securities.
  • Professional Management: Experienced fund managers make informed investment decisions on behalf of investors.
  • Liquidity: Mutual fund units can be bought and sold on any business day, providing easy access to your money.
  • Affordability: Investors can start with small amounts and gradually increase their investment.
  • Flexibility: A variety of mutual funds are available to match different investment goals and risk appetites.
  • Tax Efficiency: Certain mutual funds, like Equity Linked Savings Schemes (ELSS), offer tax benefits under Section 80C of the Income Tax Act.

Why Mutual Funds Are Better Than Fixed Deposits and Savings Accounts

1. Higher Potential Returns:

  • Mutual Funds: Historically, equity mutual funds have delivered higher returns , of around 12-15% or more, compared to fixed deposits and savings accounts, especially over the long term.
  • Fixed Deposits and Savings Accounts: FDs offer fixed interest rates, typically ranging from 5-7% per annum, while savings accounts offer even lower interest rates, generally around 3-4% per annum.


2. Inflation-Beating Returns:

  • Mutual Funds: Equity mutual funds have the potential to generate returns that outpace inflation, preserving and growing the real value of your money.
  • Fixed Deposits and Savings Accounts: The fixed returns on FDs and the low interest rates on savings accounts often fail to keep pace with inflation, eroding the real value of your money over time.


3. Tax Efficiency:

  • Mutual Funds: Long-term capital gains (LTCG) from equity mutual funds are tax-free up to ₹1 lakh per year, and taxed at 10% thereafter. ELSS funds offer tax deductions up to ₹1.5 lakh under Section 80C.
  • Fixed Deposits and Savings Accounts: Interest earned on FDs is fully taxable as per your income tax slab.


4. Flexibility and Liquidity:

  • Mutual Funds: Mutual funds offer the flexibility to invest in various asset classes and access your money anytime without penalty, except for specific funds with lock-in periods like ELSS.
  • Fixed Deposits and Savings Accounts: FDs have a fixed tenure and early withdrawal often incurs penalties. Savings accounts offer liquidity but with low returns.


5. Systematic Investment Plan (SIP):

  • Mutual Funds: SIPs allow you to invest a fixed amount regularly, making it easier to build a disciplined investment habit and benefit from rupee cost averaging.
  • Fixed Deposits and Savings Accounts: FDs require a lump sum investment, and savings accounts do not offer the same structured approach to investing. Though, monthly investing is possible in case of RDs, the advantage of rupee cost averaging is not available.

Types of Mutual Funds

1. Equity Funds:

  • Invest primarily in stocks.
  • Aim for long-term capital growth.
  • Suitable for investors with a higher risk appetite.


2. Debt Funds:

  • Invest in bonds and other fixed-income securities.
  • Focus on generating regular income.
  • Lower risk compared to equity funds.


3. Hybrid Funds:

  • Combine investments in both equities and debt.
  • Offer a balanced approach to risk and return.
  • Ideal for investors seeking moderate risk.


4. Index Funds:

  • Track a specific market index like the Nifty 50 or S&P 500.
  • Provide broad market exposure with lower management fees.
  • Suitable for passive investors.


5. Sector/Thematic Funds:

  • Focus on specific sectors or themes, such as technology, healthcare, or sustainability.
  • Provide targeted exposure to particular industries.
  • Suitable for investors with specific interest in certain sectors.

How to Get Started with Mutual Funds

  • Set Your Investment Goals: Define your financial objectives, such as saving for retirement, education, or wealth creation.
  • Start Investing: Open an account with us and begin with a lump sum or systematic investment plan (SIP). We will curate and suggest funds based on your risk tolerence and investment goals.
  • Monitor Your Investments: We will regularly review your fund’s performance and suggest adjustments as needed to stay on track with your goals.

Frequently Asked Questions (FAQs)

What is a SIP?

  • A Systematic Investment Plan (SIP) allows you to invest a fixed amount regularly (monthly or quarterly) in a mutual fund. This disciplined approach helps in averaging the purchase cost and building wealth over time.


Are mutual funds safe?

  • While mutual funds offer diversification and professional management, they are subject to market risks. It’s important to choose funds that match your risk tolerance and investment goals. However, mutual funds in India are regulated by three authorities SEBI, RBI & AMFI making it one of the most safest investment option.


Can I withdraw my money anytime?

  • Yes, mutual funds offer liquidity, allowing you to redeem your MF units on any business day. However, certain funds may have exit loads or specific lock-in periods, such as ELSS (Equity Linked Savings Scheme) funds.


How are mutual funds taxed?

  • Taxation depends on the type of fund and the holding period. For example, equity funds held for more than a year are subject to long-term capital gains tax, while short-term gains are taxed at a higher rate. It’s advisable to consult a tax advisor for specific details.


What is the minimum investment amount?

  • The minimum investment amount varies by fund, with some allowing investments as low as ₹500 for SIPs. Check the specific requirements of the fund you’re interested in.



Investing in mutual funds offers the potential for higher returns, tax efficiency, and greater flexibility compared to traditional savings options like fixed deposits and savings accounts. Start your investment journey today and work towards achieving your financial goals with confidence.

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