Know How to Invest and Save Tax

An organized investment will not only give you long term benefits but will also help you save tax. Equity-linked Saving Schemes (ELSS) funds can help you save your taxes while the investment is made on equity-related securities of corporates and other similar equities. If you are willing to save up to Rs 46,800 in your Tax, then ELSS investment is the best choice you can make. One of the advantages of investing in ELSS is that there is no maximum limit of investment which indicates the fact that a large part of your money can be freed from additional tax which you need to pay otherwise.

The ways ELSS works

ELSS is a tax saving scheme under section 80C of income tax. This is a mutual fund scheme with a locking period of three years. The benefits of investing in such schemes are that the mutual fund returns will grow over time and will provide you with great benefits at the time of retirement. However, this type of scheme is open-end schemes allowing you to withdraw the money after the locking period is over. It is suggested that the fund should remain invested to make sure that the pre-decided goals of retirement are met. Alongside saving your tax these saving schemes would offer you security at the time of your retirement.

What are the benefits of investing in mutual funds?

One of the biggest benefits of investing in mutual funds is that you need not have to go through a complicated process of investment. The mutual funds are easy to understand and you know exactly where you are investing. You need not have experience or prior knowledge of the stock market to invest. You can invest as low as Rs.500 in the schemes. While you are willing to invest higher, the sky is the limit. With investment in a mutual fund, you can have professional management of your money. Rather than getting deep into the market analysis you can just invest and do other important things in your life. There are a variety of mutual fund investments available. ELSS is one scheme that is beneficial for investors who are willing to save a good amount of tax and get higher returns. If you are willing to make a smart investment than mutual funds are the best ways to do so. You may consult a fund advisor to know the details of your investment and save a good amount of money for the future.

Things to know before investing in Mutual Fund

Before you decide to invest your hard-earned money anywhere you need to know the pros and cons of the same. Investing in mutual funds is no exception. You must know the plusses and the risks before you decide to make an investment. To get you a clear picture of the mutual fund this article presents details and insight into the stock market. This can be extremely helpful when it comes to making investments in the market.

Difference between mutual funds and stocks

Knowing the difference between mutual funds and stocks is essential for an investor. Making an analysis of mutual funds vs stocks is beneficial before making your investment strategies. The stock market offers you share which is the strategy of the business to grow. You have the choice to select stock by understanding the market trend. It needs professional analysis and skills to make sure that the right investment is made. Mutual fund, on the other hand, is passive in nature. You need not have to analyze the market for such investments because there are market professionals and fund advisors who would take care of the investment that needs to be made. Investing in mutual funds is safer and generates profit in the long term. You may opt for systematic investment plans (SIP) where a fixed amount of investment over a period of time can be made.

Understanding the risk in mutual fund investment

To have a clear picture of mutual fund investment you also need to assess the risk in mutual fund investment. The level of risk depends on the amount of investment made in the mutual fund. However, there are certain market risks associated with the same. In the circumstance an unavoidable risk prevails in the entire market the mutual fund will also be affected. In certain cases the investments cannot be sold by the fund due to lack of buyers. This is known as liquidity risk. Another major risk is the credit risk where the issuer of the bond is unable to repay the bond. Such risk will lead to a worthless investment from the part of the investor as the investor will generate no profit and the amount invested will be lost.

Though there are certain risks associated with mutual fund investment, such investments are safer than stocks and bonds. All you need to know is how much to invest in mutual funds. For the same, you may consult a fund advisor.

All about Investments

Everybody has a certain level of concern for the future. It is a known fact that the security of the future lies in growing money from time to time. Now here comes the big question “how to grow money?”. There is no hidden secret in that and the answer is simple. Money grows with systematic investments. To make sure that you understand the way of systematic investment you need to understand certain concepts. Here are a few essential concepts and information that you need to have for a systematic investment.

The role of inflation

Inflation is a pattern of increase in the price of products and services with passing years. The rates of inflation would tell you the ways your purchase power would decrease every year while investments for the future is not made. An inflation calculator can be useful for predicting the future cost of products and services giving you a clear picture of how much you need to gain a return on your investment to maintain a standard of living in the future. If you are asking yourself "How much to invest for the future?" then this calculator can give you proper information about your investments.

Benefits of investing in mutual funds

Investing in a mutual fund is like investing your money in a way that your money is professionally managed. You can invest a small amount of money yet be sure that a professional handle your money to get you the best returns. This is an approach in which you can put in your contribution to the pool of money that will be invested collectively according to the objective of the fund. To make sure that your investment generates profit according to your expectations you need to calculate the investment values at the time of maturity. A mutual fund calculator is used for calculating the fund returns based on the investments being made. 

SIP the easiest form of investment

If you are willing to invest in mutual funds than there is a disciplined manner to do so. The mutual funds offer a systematic investment for the investors when it is popularly known as the Systematic Investment Plan (SIP). The process of sip investment is the way through which a fixed amount of money can be invested within a pre-defined interval for a particular mutual fund. With SIP you can invest as low as Rs. 500 to start with. With investments in SIP, you will not have to worry about the dynamics of the market and reap benefits in the long term. 

So, Understanding these basic concepts will allow you to grow your money over the years without worrying about the future.

Know Exchange Traded Fund to Grow Virtual Assets

If you are an investor that you need to know about the exchange-traded fund to grow your virtual assets. ETF funds are an important product that is being created in recent time. If the ETF is being used in a wise way than it will reap several benefits. This can be considered as an excellent tool for the achievement of goals in terms of investments. For an investor, it is necessary that ETF is being understood in detail to make the best investments that will benefit the investor in leaps and bounds.  

What is an ETF?

It is essential to know what is an ETF? This is one valid question that needs to be understood for knowing the right investment that needs to be made. ETF can be considered to be a group of securities that can be sold or bought through a stoke exchange or a brokerage firm. ETFs can be offered on any asset that is conceivable. If you are willing to invest in short markets than there are several innovative ETF available. The investor can also invest in such ETFs to avoid taxes on short term capital gain and increase leverage. 

Different types of ETF

In today’s time, there are more than trillion-dollar ETF investments. There are more than 1000 products on ETF that are available. However, there are different types of ETF that are available and understanding the types of ETF is essential for the investors. The different types of ETF include:

• Market ETFs
• Bond ETFs
• Sector and industry ETFs
• Commodity ETFs
• Style ETFs
• Foreign market ETFs
• Inverse ETFs
• Actively managed ETFs
• Exchange-traded notes
• Alternative investment ETFs

All the different types of ETFs are being designed to track a particular group of securities.

The ways ETF functions

When the stock exchange opens the ETF can be bought and sold like stocks of a company. It also has an intra-day price data and ticker symbol like that of company stock. The exchange traded funds function in a similar way to that of company stocks but there are certain differences. In ETF the number of outstanding shares can vary on a daily basis. This is due to the fact that there is a continued creation of and redemption of the existing share on a daily basis. The continuous creation and redemption of outstanding share is one of the reasons why ETF is beneficial as the market price of ETF is always in line with the underlying securities.

Understanding SIP and SWP in Details

Demonetization is an important factor that triggered the need for understanding SIP and the benefits of the same. However, there is still much confusion that revolves around SIP. Even investors who are in the game are still confused about SIP. So, it is essential to understand what is sip? Even now some of the investors believe that SIP is a product. They invest money while thinking that they are investing in a particular product. However, the understanding of the investment in detail is essential for the investor. There is much confusion that revolves around SIP and Mutual funds too.

So, what is SIP?

SIP stands for a systematic investment plan. This is a scheme that helps the investor to make an investment on a systematic basis on mutual funds. This can also be considered as an equity mutual fund scheme. There are several benefits of investing in SIP. This is one of the ways through which financial discipline can be achieved. This is one of the ways through which the investor does not have to analysis the mood of the market which making any investment. SIP is a scheme that can help in the growth of investment over a period of time.

The ways SWP reaps you the benefits

SWP is a systematic withdrawal on the investment made on mutual funds. This is a systematic redemption process in which the withdrawal is done in a systematic manner on the mutual funds rather than someone making a lump sum withdrawal. To understand the benefits of a Systematic Withdrawal Plan it is necessary to understand what is a systematic withdrawal plan? The understanding of SIP helps in knowing the benefits that are being taken out of the systematic withdrawal scheme. SWP can be considered to be an approach that is opposite to SIP.

The schematic withdrawal on SWP

There is a certain risk associated with the investment on SIP. This risk can be minimized with the systematic withdrawal scheme. In SWP a systematic withdrawal is done while channeling the investments with the bank's savings account. The Systematic withdrawal scheme can be one of the strategies through which the market fluctuation can be avoided while making the withdrawal. This is one of the ways through which the systematic withdrawal on the investment can be done over a term period which leads to minimizing of risk associated with the withdrawal which otherwise incurs some risk.

Difference between Debt and Equity

Mutual fund investments have become a popular method of safekeeping and growing your funds for future financial goals. However, a few schemes come handy during the need to save money, grow money and provide security to the funds, such as equity and debt fund.

Both being most-chosen by newcomers who wish to grow their money in various ways, equity fund and debt mutual funds have gained their place as two trustworthy schemes in the recent market.

Now, what is the equity fund? Well, unlike debt fund which invests in government-oriented securities and bonds, equity funds opt for company stocks and shares. Such a mutual fund scheme believes in thorough market research of company portfolios, scanning the market for fluctuations and provides their investors with stocks that perfectly suit their needs.

Equity funds, unlike debt funds, plays with the idea of risk factors, as their investors believe in studying the market, understanding the risk formats to gain the most profitable returns out of the investment.

A scheme so diverse provides long-term and profitable returns, with benefits such as tax deduction from income (ELSS scheme), diversified investment options through various sectors and even a Systematic Investment Plan (SIP).

Not to forget, you can always choose from a plethora of options under market capitalization such as:

• Large Caps: Stocks from dominating markets with stable activities and low-risk factors.
• Mid Caps: Although there are more risk-factors in mid-cap stocks, the potential growth is much more than large-cap here.
• Small Caps: small or micro-cap schemes have the potential for growth in the market as from new companies, hence there is a large risk-factor involved. 

Now that we know about what is equity mutual funds scheme, let's understand the debate, that is equity funds vs debt funds

Here are some of the difference between debt and equity funds:

• Nature

Debt mutual funds invest mostly in non-convertible debentures, government bonds and securities in the market. Such units provide a fixed-income benefit to the public who wishes for lumpsum and steady return from the investment. Such funds have lower-risk rates and more secure.

Equity funds work with company stocks and shares of various caps after scanning the market and understanding potential returns. Investors of equity funds wish for profitable earnings and growth in their capital. Such funds can be volatile due to fluctuations, recessions and currency value changes in the market. 

• Taxation

For debt fund schemes, the taxation on short-term investment depends upon the market while for long term (more than 3 years) is 20% Whereas, short-term equity funds fall under a 15% tax rate while long term ( more than 1 year) remains tax-free. 

Hence, if you have a high-risk appetite and desire profitable returns for money growth, opt for Equity funds. 

Benefits of Mutual Fund Investment

If you wish to know what are the benefits of mutual funds and how they can help you create long-term wealth, this article can help you. We detail the benefits of mutual fund investment and give you solid reasons why you should start an SIP (Systematic Investment Plan) so you can meet your financial goals and prepare for the future.

Liquidity

It is very easy to purchase and exit mutual funds unless you have invested in a closed-ended scheme. If you need urgent cash, you can sell your fund units at any time. However, some plans impose a pre-exit penalty or exit load, so be aware of the terms and conditions. Also, keep in mind that mutual fund transactions occur only once per day after the scheme releases the day’s NAV. 

Safety

One of the main benefits of investing inmutual funds is safety as they are as secure as bank products. Mutual funds are strictly governed by regulatory bodies like AMFI and SEBI, and you can easily learn about the credentials of a scheme from them. Plus, they provide a grievance redress system to help resolve investor concerns promptly and satisfactorily. 

Save Tax 

You can save tax under section 80C by investing up to Rs. 1.5 lakh a year in an ELSS (Equity Linked Savings Scheme). This scheme has consistently provided higher returns compared to other tax-saving plans like FD. Thus, tax-efficiency through ELSS investment is one of the key benefits of mutual funds. 

One-time or Systematic Investment 

If you have extra money at hand you can opt for a lump sum one-time investment. Salary earners who have to contend with monthly expenses can opt for a SIP on a quarterly or monthly basis and invest steadily in a good scheme. SIP installments can be as low as Rs. 500 per month, so you can start with a small amount initially and then enhance it as you grow in confidence and your earnings increase over time. 

Diversification

If you are averse to the market risks of equity-based schemes, you can opt for a diversified plan that includes money market instruments, debt funds, etc. This helps you to avoid putting all your eggs in one basket and also avail the guaranteed returns from fixed income instruments. In this way, you can minimize your risk and the possibility of loss. 

Conclusion

Other benefits of mutual fund investment include expert management, reduced expenses for bulk transactions, fast and painless investment process, automated payments, and creation of long-term wealth. So do your homework and select a suitable mutual fund scheme to invest in based on your appetite for risk and the returns you wish to avail.

Mutual Fund Calculator

Economics is the recent talk in the town! A global slowdown is on the rise and some economists say that a recession is expected in 2020. In such a situation, it is crucial to invest our money in the right places. At Mutual Fund Sahi Hai, you have the option to invest through tens of diverse Equity, Debt or Liquid funds.

Mutual Fund Calculator with Inflation

Basically, mutual funds invest the money in stocks and bonds. So, why should we invest through them and not directly? The simple answer is that we have professional managers who do a lot of research about various stocks and bonds and then invest accordingly. For a small fee, you not only get a well-qualified fund manager but also get administrative and accounting services for the investments. Another question that arises is that why one should invest through mutual funds rather than investing in fixed deposits? FDs give a fixed return every year and are thus considered a safe investment. However, it usually gives fewer returns than the inflation rate. 

What is inflation? In layman’s term, it is the increase in the prices of goods and services over time. So, if you put Rs. 100 in the bank at a 6% annual rate, you would get Rs. 106 at the end of the year. But, the inflation rate of India is 7% which puts you in a loss. This is where mutual funds beat the fixed deposits. We provide a mutual fund calculator in which you can calculate the inflated amount to your present amount. A sum of Rs. 100,000 would be equivalent to Rs. 197,000 at an annual inflation rate of 7% over a period of 10 years. Our mutual fund calculator with inflation tells you how much returns your investments need to make to main the present standard of living. With us, you can make the right investments and get inflation-beating returns! 

For those who do not wish to invest all the amount at once, we also provide a systematic investment plan (SIP). It allows you to invest small amounts in periods rather than the whole lump at once. The mutual fund return calculator calculates the future value of your periodic SIP investment as well. It also helps you to achieve a target goal by stating the periodic SIP investment that you would have to make for a certain number of years. 

However, these mutual fund calculator with inflation is just for illustrations, as mutual funds do not give a fixed rate of return. It all depends on the volatility of the market and the economy. But, it is a great convenience for people who invest their money in future requirements.

The Different Kinds of Mutual Funds

One great way of earning some extra cash besides your salary is investing in a mutual fund scheme. The idea is easy enough. You find a scheme you like, you make an investment and basically start making a profit in the form of dividends. But sometimes all that is easier said than done. With the sheer number of mutual fund schemes out there, it sometimes gets difficult and often confusing to find a scheme that best suits your various needs. But, before you find out about the different types of mutual funds, you need to know what it actually means and then go from there.

So, what exactly is a mutual fund?

A mutual fund is a pool of money that is collected from investors like you and handled by a professional. Your fund manager takes the money and invests it into buying securities like bonds and equities and what not. Depending on the performance of your said securities, you make a profit in the form of dividends. Although some mutual funds allow you tax benefits instead of dividends. 

Now, there are many different kinds of mutual fund schemes out there, giving you the option to choose according to your needs and tastes. Some of them have been discussed below:

• Systematic Investment Plans

The systematic investment plans or SIPs allow you to invest tiny sums of money periodically instead of investing a large lump sum. This a specified amount of money is deducted from your account on a quarterly, monthly or weekly basis.

• Equity Funds

Equity funds allow you to invest a large amount of money to buy shares of a company or an organization. This means a percentage of the profit made by your shares will be yours.

• Debt Funds

To know what is debt fund, you need to know that sometimes companies require financial help that they derive from your investment. So, the company is legally bound to pay you interest money each month. If the company cannot stay afloat and dissolves, you get your money back.

• Liquid funds

Liquid funds are debt funds where you invest for a short period of time like a day to maximum a period of 6 months. The investments are made of short-term securities like government securities, treasury bills, and call money. With the liquid mutual funds, you can redeem your money within a day.

All the mutual fund schemes out there, including but not limited to the ones listed here, also offer what one calls the direct mutual find. This type of fund is the opposite of a regular fund where you employ a broker or a distributor to invest with the AMC. Instead, you skip the process and invest directly with the AMC. Thus, you save money when it comes to distributor fees.

The Benefits of Investing in Mutual Funds

The benefits of investing in mutual funds are many and varied. One of the obvious things that you get out of investing is that you have the chance of making some extra money each month besides your usual salary.  Or you can choose to make long term plans and invest in funds that let you save up for, say, your retirement, your children’s education or even their weddings. Other than these things, many mutual funds also offer you tax benefits. The trick is to research well and find a scheme that is perfectly suited to your needs. But the process can tend to get a bit confusing due to the sheer number of mutual fund schemes out there. Before you find out anything else and are knee-deep in research, though, you need to know what mutual funds actually are.

What are mutual funds?

A mutual fund is basically a pool of money that is collected from a lot of investors and managed by a professional referred to as a fund manager. The fund manager then takes the money and uses it to buy securities like equities, bonds, and small caps. Depending on how the securities perform in the market, you get a percentage of the profits that are calculated by referring to how much you're invested in the first place. However, not all mutual funds offer profits in the form of dividends. Some even offer one tax and other benefits.

The many perks of investing in mutual funds

One of the best ways to secure your money and also reap multiple benefits in the process is investing your money into mutual fund schemes that suit your many needs and specific preferences. Once you have narrowed down the specific schemes after the appropriate amount of research and accounting for inflations using an inflation calculator, you would like to invest in, you will be able to start earning money or getting tax benefits out of them on weekly, quarterly or monthly basis. Some other benefits of investing in mutual funds include: 

1.       Being able to sell your shares and getting money out of it at any moment of time. The value of those shares might vary depending on the market.

2.       You can choose to invest tiny amounts of money periodically over a long period of time and earn and save more in the process

3.       ELSS funds give you a lot of tax benefits

You can invest small amounts of money or a large number of shares and watch them increase in value with time.

How to Invest in Mutual Funds

If you are someone planning on investing in mutual funds for the first time, you will know that it all tends to get a little confusing. After all, there are a lot of conflicting opinions and articles about mutual funds out there. Any newcomer can get blown away by the sheer amount of information on what mutual funds are and how they work. Truth is though, once you do a little research, mutual funds and its schemes aren’t that difficult to follow.

What is a mutual fund?

The concept is rather easy. It is a pool of money that is gathered by collecting investments from other investors like you. This money is then used to buy stocks and other securities. The securities, in turn, bring home profits that are then distributed amongst the investors depending on how much they invested initially. There are a lot of different mutual funds out there, though, and some of them even help you reduce taxes instead of getting you profits from securities, which are also known as dividends. 

How to invest in mutual funds

Once you understand the basic concept, the how of the matter becomes far easier to handle. The idea is to simply choose a scheme that is most suited to your needs and demands. You know mutual funds are pools of money handled by professionals to buy securities. These securities all work differently, though, due to the sheer number of them out there. Money market, equities, and bonds will get you different kinds of dividends within different lengths of time. If you are planning on saving up for your retirement or your children’s education and subsequent marriage, you will want to invest in long-term schemes. If you are just looking to get some extra cash on the side every few months, you should invest accordingly.

Are there any risks involved?

A lot of people say that mutual funds are risky and tend to make you wonder if you are going to get your money back. But as long as you plan well and, with risk diversification, you can easily mitigate the risks of investing while earning extra money. Just keep a few things in mind while investing in a scheme:

1.       Choose a scheme that aligns with your objective. If it is your retirement or other long term objectives, invest accordingly.

2.       Know that your fund will invest in multiple securities and not put all your money in one place. So, even if one scheme fails, your money is still safe

Know that the funds are handled by trained professionals. Their job is to make sure you get your dividends and they use their expertise to do just that.