You order in the most sumptuous Indian meal, the one that seems the spiciest on the menu but decide to get a diet soda with it. That’s most of us, who think all the spice and grease would get balanced out by the guilt and sugar free drink. Mutual funds are like this meal, put together to maximise your returns while minimising the calories or risk.
Now finding that balance in any other investment is a little tricky. There’s equity, great returns when the markets are up but not so exciting a situation when the markets come down. And then there’s the not so spicy Fixed Deposits, a fixed rate investment, better than a savings account but that’s about it.
Any type of investment comes with both risks and rewards.
If you have an appetite for the ups and downs of the market, equity investments are great.
Large Cap equity is relatively stable as compared to Small Cap, and can yield big on a good day.
Best to invest in equity, when you’re absolutely sure and
willing to wait for your investment to grow.
Fixed deposits offer the greatest amount of stability with varying, tenure-based rates, higher than a savings account but much lower than liquid mutual funds.
Mutual Funds can be low-risk as well as high-risk. Equity-based funds invest in equity markets and hence can deliver better returns over a longer period of investment. Large-cap mutual funds are usually less volatile and would offer more safety as compared to a small-cap fund.
Then, there are gold-based mutual funds that invest in gold or companies involved in gold mining, etc. These funds tend to do exceedingly well when gold prices rise, as we have seen so far this year.
Liquid funds are one of the safest mutual funds since they invest in fixed-rate debt instruments. Liquid funds have historically generated returns higher than a fixed deposit and are ideal for creating an emergency fund.
If you’re someone who has goals set-up for themselves or has cash sitting idle in a savings account, mutual funds are probably the best way to get to them without overburdening yourselves.
All mutual funds listed on the Freecharge app are rated basis past performance, risk(s), etc. So, when you’re starting your investment journey, it’s best to look at funds that are rated well.
Mutual Funds have experienced Fund Managers who are responsible for the fund’s performance, through market highs and lows. This means your hard-earned money is in capable hands.
Starting a systematic investment plan, or SIP is the best way to bring some discipline to your investments, whatever be the fund you decide to go ahead with. A minimum amount of ₹500 can get you started with your first investment and on Freecharge it’s absolutely paperless and contactless.
All you need is your mobile and two minutes to spare.
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