Nowadays, people invest in various financial instruments. Out of them, the most popular are Mutual Funds. It is a professionally managed investment fund. It systematically pools money from different investors and gets used to purchase securities. This way, it reaps profits to the holder through the stakes.
But to benefit from a Mutual Fund Investment, you should know its schemes. It helps you select one that matches your financial needs. Hence, you garner more profits through your investments.
- Lumpsum Investment
Sometimes, individuals accumulate a surplus of funds. They then start looking for avenues to invest in Mutual Fund. In such cases, they could opt for a Lumpsum Investment. It is a scheme that allows investors to invest a considerable sum in one go. This Mutual Fund has high market potential. You could benefit from it significantly during favourable market conditions. But since it involves a large sum, it also holds high risks. Therefore, it is not ideal if you are a risk-averse investor.
- Systematic Investment Plan
A Systematic Investment Plan is yet another popular investment type. It is suitable for those with having a stable monthly income. This scheme deducts a fixed amount from your Savings Account monthly. Your Mutual Funds provider decides the value of this amount. If need be, you can change the amount. If you wish to invest more each month, ask your provider to increase SIPs. Else, request a new SIP through online Mutual Fund portals.
- Equity Linked Savings Scheme
An Equity Linked Savings Scheme or ELSS invests in Equity-related products. It is an open-ended scheme. Its profits get exempted from taxes and are ideal for investors who do not want to bear taxes. This allows investors to retain tax-free capital gains up to Rs. 1 lakh. You may have gained enough profits through the ELSS scheme as an investor. Now, you wish to transfer that money into your Bank Account. For this, the scheme permits you to withdraw up to Rs. 1 lakh of profits.
- Equity Mutual Funds
An Equity Mutual Fund invests in Securities and Bonds. Investment in this fund is either Lumpsum or SIP. Once the investor makes the deposit, it invests in various Equities. Hence, it is suitable for people seeking long-term investments. Equity Funds come in different types. One of them is ELSS. In this way, it is also a tax-saving fund.
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