Mutual Funds Invest in Mutual Funds Know your Investor Personality Explore Mutual Funds Check Portfolio Health Equity funds Debt funds Hybrid funds Invest in Mutual Funds Know your Investor Personality Explore Mutual Funds Check Portfolio Health Loan Against Mutual Fund Tax Saving Maximizer Insurance Term Life Insurance Health Insurance Term Life Insurance Health Insurance Calculators SIP Calculator Mutual Fund Calculator FD Calculator NPS Calculator See all calculators Mutual Fund Calculator See all calculators Great! You have sucessfully subscribed for newsletters for investments Subscribed email: Mutual funds help you grow your wealth and achieve your financial goals by offering the potential to generate inflation-beating returns over the long term. ET Money advantages What are Mutual Funds? It is an investment vehicle where multiple investors come together and pool their funds. This pooled money is then invested by the fund manager across various asset classes including equity, debt, gold, and other securities to generate returns. The gains and losses incurred from such investments are divided among investors in the proportion of the share of investment. To learn more about them, read our detailed guide on What are mutual funds. Advantages of Mutual Funds Professionally Managed One of the key benefits of investing in these funds is that your money is managed by professional money managers who have years of investing experience. It is the ease of buying and selling an investment. Mutual Funds offer superior liquidity compared to some of the other instruments as you can buy and sell them anytime you want. Like any investment product, the performance of these funds are measured in terms of the kind of returns they deliver. Historically, mutual fund returns have been higher than the returns delivered by other traditional investment options like Bank FDs, RDs, PPF, etc. You can start your investments in these funds with as low as ₹ 500. Therefore, you don't need large sums to start investing. Diversification As mutual funds invest in a basket of stocks, bonds, etc., you can own a diversified portfolio even with a small investment amount, this helps reduce risk as well. Mutual fund schemes are regulated by the SEBI. The tight regulations ensure transparent processes and protect the investors' interests. Ways to Invest in Mutual Funds SIP (Systematic Investment Plan) SIP allows you to invest a fixed sum at regular intervals. SIP is one of the most recommended ways to invest in mutual fund schemes as it is convenient. It also helps you average out the cost at which you buy the units of these funds. Read more about, What is SIP? When you make a one-time investment, it is called lumpsum. Lumpsum investments are generally done when people have got a big sum of money like bonuses or payments from a sale of an asset. Types of Mutual Funds Based on Asset Class Mutual funds in India are classified into different categories based on the asset class they invest in. Some popular categories are as follows. Equity Mutual Funds Equity funds invest a majority of their assets in stocks. These funds are classified into different categories based on the market cap of the stocks they invest in. Types of Equity funds: Large-Cap Funds These funds invest at least 80% of their assets in the top 100 companies by market capitalization. These funds invest at least 80% of their assets in the top 100 companies by market capitalization. Mid-Cap Funds These funds invest at least 65% of their assets in the next 150 (101st to 250th) companies ranked by market capitalization. These funds invest at least 65% of their assets in the next 150 (101st to 250th) companies ranked by market capitalization. Small-Cap funds Such funds invest at least 65% of their assets in companies ranked 251 and above by market capitalization. Such funds invest at least 65% of their assets in companies ranked 251 and above by market capitalization. Multi-Cap Funds These funds invest at least 25% of their assets in each of the large, mid, and small-cap stocks. These funds invest at least 25% of their assets in each of the large, mid, and small-cap stocks. Debt Mutual Funds Debt funds generate returns by lending money to corporates and the government by buying their debt papers. These funds are classified into different categories based on their lending period and credit quality of the papers. Types of Debt funds: Money Market Funds These funds generate returns by lending to companies or governments for up to 1 year. These funds generate returns by lending to companies or governments for up to 1 year. Corporate Bond Funds These funds earn returns by lending mostly (at least 80%) to companies with the highest-rated debt papers. These funds earn returns by lending mostly (at least 80%) to companies with the highest-rated debt papers. Overnight funds These funds earn their returns by lending to companies or governments for one business day. These funds earn their returns by lending to companies or governments for one business day. Liquid Funds These funds generate their returns by lending to companies or governments for up to 91 days. These funds generate their returns by lending to companies or governments for up to 91 days. Hybrid funds invest in a mix of asset classes, including equity, debt, or gold. There are multiple categories of hybrid funds based on how much they allocate across different asset classes. Types of Hybrid funds: Aggressive Hybrid These funds have to invest at least 65% of their assets in equities while it can't exceed 80%. The rest goes into debt.

These funds have to invest at least 65% of their assets in equities while it can't exceed 80%. The rest goes into debt. Multi-Asset Allocation These are hybrid funds that invest at least 10% of the total of their assets across at least three asset classes, such as equity, debt, gold, etc. These are hybrid funds that invest at least 10% of the total of their assets across at least three asset classes, such as equity, debt, gold, etc. Dynamic Asset Allocation funds Also known as Balanced Advantage Funds, these funds can go up to 0-100% in equities or debt based on predefined asset allocation models they follow. Also known as Balanced Advantage Funds, these funds can go up to 0-100% in equities or debt based on predefined asset allocation models they follow. Arbitrage Funds These funds generate returns by using opportunities of price differences of securities in different markets. These funds generate returns by using opportunities of price differences of securities in different markets. Best Investment Themes Top Index Funds A passive, low-cost way to invest in the stock market, mirroring NIFTY, SENSEX returns. Warren Buffett's preferred choice for retail investors. The list includes selected funds that have consistently delivered higher SIP returns than their peers. Low Risk Mutual Funds These funds focus on keeping your capital safe and usually offer more stable returns than pure equity funds. Mutual Funds For Beginners Large Cap Index Funds, ELSS, and Balanced Advantage Funds are good options to start your investments. High Risk, High Return Funds High-potential Small & Mid Cap Funds offer high returns by investing in risky yet promising stocks. Ideal for aggressive investors with long-term horizons, expecting volatility. View 30+ Mutual Fund Companies How To Start Your Investing Journey On ET Money? At ET Money, we follow 3 easy steps to make mutual fund investments simple, convenient, and quick: 1 Select your preferred fund Select your preferred fund 2 Complete KYC & set up EasyPay without any paperwork Complete KYC & set up EasyPay without any paperwork Mutual Fund Tools & Calculators Helps you calculate SIP returns Lumpsum Calculator Helps you calculate lumpsum returns Mutual Fund Calculator Helps you calculate SIP and lumpsum returns Watch & Learn To Maximize Your Mutual Fund Returns More than 5.6 Lakh Subscribers. Watch all Videos Read These Blogs To Boost Your Mutual Fund Returns How to Invest in Mutual Funds? Learn how to invest in mutual funds with our step-by-step guide. Start growing your wealth for future goals today! Types of Mutual Funds in India Understand the different types of mutual funds like equity, debt, hybrid, and more to make informed investment decisions! How to Invest in SIP Discover how to start a SIP and build wealth systematically. A simple way to achieve your financial goals easily! What India Says About ET Money 4.4 on Google play store ET Money is a user-friendly app that has made buying mutual funds pretty easy. Details of each fund like past returns, expense ratio, etc. have been displayed clearly for investing strategically. ET Money has made my search for investment products easier than ever. I can get all information related to investment products like mutual funds and NPS in one place. ET Money is a nice app that provides a good user experience. The funds have also been ranked by their experts which helps while taking investment decisions. Frequently Asked Questions What Is the Minimum Amount Required to Invest in Mutual Funds? You can start investing with as little as ₹500 in some mutual fund schemes, especially through SIPs (Systematic Investment Plans) . For lump-sum investments, most mutual funds have a minimum amount requirement of ₹1,000, depending on the fund house. You can start investing with as little as ₹500 in some mutual fund schemes, especially through SIPs (Systematic Investment Plans) . For lump-sum investments, most mutual funds have a minimum amount requirement of ₹1,000, depending on the fund house. How Do I Earn Returns from Mutual Funds? You can earn returns from mutual funds in two ways: 1. Capital Gains: When the NAV of the fund appreciates. 2. Dividends: If the fund declares a dividend payout. Remember that returns from mutual funds depend on the performance of the underlying assets and market conditions. Can I Redeem My Mutual Funds Anytime? Most open-ended mutual funds allow you to redeem your investment anytime at the prevailing NAV. However, some funds may levy an exit load if redeemed before a specified period, typically ranging from 0.5% to 1%. Also, tax-saving schemes such as ELSS (Equity-Linked Savings Schemes) have a mandatory 3-year lock-in period during which you cannot redeem your investment. How Are Mutual Fund Withdrawals Taxed? On withdrawal, if your redemption value is higher than the purchase price of a mutual fund, the difference is classified as capital gains. The taxation depends on the type of fund and the holding period. Equity funds: If sold within 1 year, gains are Short-Term Capital Gains (STCG) taxed at 20%. If sold after 1 year, gains are Long-Term Capital Gains (LTCG). LTCG up to ₹1.25 lakh in a financial year is exempt; above this, it is taxed at 12.5%. Debt funds: The gains from debt mutual funds are no longer eligible for LTCG with indexation. Regardless of the holding period, all gains are now taxed as per the investor’s income tax slab. Are Mutual Funds Regulated in India? Yes, all mutual funds in India are regulated by SEBI (Securities and Exchange Board of India) to ensure transparency, investor protection, and fair practices in the mutual fund industry. How to Choose a Good Mutual Fund Investment? Choose a fund based on your financial goals, risk tolerance, and investment horizon. Evaluate factors such as past performance consistency, expense ratio, fund manager experience, and benchmark comparison. How Can I Invest in Mutual Funds on ET Money? Download the ET Money app , complete your KYC process, and start investing in mutual funds online in just a few minutes.