Wednesday, 20 Feb 2019

Mutual Fund Can Help You Plan Your Financial Need Over Traditional Products?


There are many reasons to buy a mutual fund compared to traditional products. How about we look at the top 10 reasons to buy a mutual fund?

  1. Mutual Funds Offer Diversification
    The beauty of a mutual fund is that you can buy a mutual fund and obtain instant access to a hundreds of individual stocks or bonds. Otherwise, in order to diversify your portfolio, you might have to buy individual securities, which exposes you to more potential volatility.
  2. Mutual Funds are Professionally Managed
    Many investors don’t have the resources or the time to buy individual stocks. Investing in individual securities, such as stocks, not only takes resources, but a considerable amount of time. By contrast, mutual fund managers and analysts wake up each morning dedicating their professional lives to researching and analyzing current and potential holdings for their mutual fund.
  3. Mutual Funds Have Low Minimums
    Many mutual fund companies allow investors to get started in a mutual fund with as little as Rs.5000.
  4. Mutual Funds Offer Transparency
    Mutual fund holdings are publicly available (with some delays in reporting), which ensures that investors are getting what they pay for.
  5. Mutual Funds Are Liquid
    If you want to sell your mutual fund, the proceeds from the sale are available the day after you sell the mutual fund.
  6. Mutual Funds Have Audited Track Records
    A mutual fund company must maintain performance track records for each mutual fund and have them audited for accuracy, which ensures that investors can trust the mutual fund’s stated returns.
  7. Safety of Investing in Mutual Funds
    If a mutual fund company goes out of business, mutual fund shareholders receive an amount of cash that equals their portion of ownership in the mutual fund. Alternatively, the mutual fund’s Board of Directors might elect a new investment advisor to manage the mutual fund.

8.   Mutual Fund Investments are Tax efficient

As per the current income tax laws most of the returns of the returns are either TAX FREE or TAX efficient compared to the traditional investments.


9.   Conveniences:

The transactions can be done online, thru SMS and also offline. You can also get the details of your investment online also.


10. Superior Returns:

Most of the Mutual Fund products are able to generate superior post tax returns compared to its peer traditional products.


How Mutual Fund Can Help You Plan Your Financial Need Over Traditional Products?

Traditional Products

Mutual Fund Products

Saving Account / Current Account

Liquid Fund

30 Days to 3 Years Fixed Deposit  (Short Duration FD)

Fixed Maturity Plan and Accrual Debt Funds

Above 3 Years Fixed Deposit (Long Term FD)

Duration Funds and Gilt Funds

RBI Bonds

Govt-Sec Funds

Direct Equity

Equity Fund

Recurring Deposit Account

SIP ( Systematic  Investment  Plan )


SWP ( Systematic Withdrawal Plan )   

Purchase of Gold

Gold Funds

Mutual Fund,

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