What is a mutual fund, you ask? A mutual fund is an investment vehicle that pools the money of severalindividuals and further invests it in various avenuessuch as debt, equity, and money market instruments, etc. Mutual fundsare actively or passively managed by professional mutual fund experts.
Mutual fundsinvestments are offered undera plethora schemes/sub-types that cater to the vast needs of investors. Whether you are looking to achieve your short-term goals or looking forward to building a corpus for a secure future, you can consider investing in mutual funds to achieve all your financial goals.
Before you commence your financial journey andinvest in mutual funds online, there’s some basic homework involved. First, evaluate why do you want to invest in mutual funds? This will aid you to identify your financial goals. Next, determine the timeframe in which you wish to achieve these goals. This will help you to identify your investment horizon, i.e. short-, mid-, or long-term). Lastly,find out how much risk you are willing to take to achieve these targets. This will help you identify your risk appetite.
Mutual funds benefit you in many ways when it comes to meeting your financial goals. As a thumb rule of investing, you should consider choosing debt funds to meet your short-term financial goals and equity mutual funds to achieve your long-term financial goals.
Now that you are clear with your basics, let’s focus on how to invest in mutual funds online.
How to invest in mutual funds?
There are several options available to investors to start on their journey of mutual fund investment. You can invest in mutual funds by submitting a duly filled application form along with a bank draft or a cheque. You can send this application formto the registrars such as CAMS or the respective Asset Management Company (AMC) or designated Investor Services Centres (ISC) along with the necessary documents. This is known as the offline method of investing in mutual funds.Alternatively, you can even invest through your bank if they offer such services.
You can also invest in mutual funds online through the websites of respective mutual fund housesorthrough their mobile applications. Further, you may also invest in mutual funds directly through the CAMS website, a mutual fund transfer agency registered with the Association of Mutual Funds in India (AMFI). This option is ideal if you are well-versed with mutual fund investments. This essentially means that you are taking care of your finances without the help of any third-party.
You should always try to choose a mutual fund scheme that shows a consistent track record. Also, it’s a good habit to keep track of your mutual fund investments and review them periodically to gauge their performance. You can stay invested in the fund if it’s performing well and is ontrack to achieve your financial objectives. If not, you can always liquidate the investment and put it in another fund. The choice is all yours. Happy Investing!