In India, mutual funds have gained popularity as an investment option because of their professional management, flexibility, and diversity. It’s essential for investors seeking to grow their wealth then he needs to understand the range of mutual fund options available in the Indian market. I’ll look at the types of mutual fund categories in this article that suit a range of risk tolerances and financial objectives.

1. Equity Mutual Funds
   High-yielding stock investments are the main focus of equity mutual funds. Investors with a longer time horizon and a higher risk tolerance should consider these funds. Market capitalization can be used to further divide them into groups like large-cap, mid-cap, and small-cap funds.
2. Debt Mutual Funds
   Debt mutual funds make investments in money market instruments, corporate and government bonds, and other fixed-income assets. These funds are appropriate for investors looking for stability and consistent income because they are thought to carry less risk than equities funds.
3. Hybrid Mutual Funds
   Hybrid mutual funds, also referred to as balanced funds, make investments in a combination of debt and equity assets. With a goal of providing both income and capital appreciation, these funds offer a well-rounded strategy. Investors with a moderate tolerance for risk can consider them appropriate.
4. Index Mutual Funds
   An index fund, like the Nifty or Sensex, tracks a particular market index. The performance of the index with which these funds are linked is intended to be replicated. For investors looking for a wide market exposure, index mutual funds are a great option because of their reduced fee ratios.
5. Sectoral and Thematic Funds
   While thematic funds invest in subjects like infrastructure or consumption, sectoral funds concentrate on particular areas like technology, healthcare, or banking. With the use of these funds, investors can match particular trends or industries with their portfolios.
6. ELSS (Equity Linked Saving Scheme)
   A kind of equity mutual fund having a three-year lock-in term is called an ELSS fund. They are a well-liked option for investments that save taxes since they provide tax advantages under Section 80C of the Income Tax Act.
7. Liquid Mutual Funds
   Liquid funds offer capital safety and liquidity through their investments in short-term money market products. These funds offer an alternative to typical savings accounts and are appropriate for investors with a short investment horizon.
8. Gilt Mutual Funds
   Government securities are the main asset class for gilt funds, which carry less credit risk. For prudent individuals seeking a safe investing option, these funds are excellent.
9. Fund of Funds (FoF)
   Investing in other mutual funds instead of individual equities is what Fund of Funds does. These funds are appropriate for investors seeking a well-managed, diversified portfolio since they offer diversification across many fund types.
10. Gold Mutual Funds
    Gold funds make investments in assets linked to gold or in actual gold. They make it possible for investors to invest in gold without requiring actual storage. An appealing choice for investors wishing to diversify their holdings is gold mutual funds.

Conclusion

A wide range of investor preferences and financial objectives are satisfied by the diversity of mutual funds that are offered in India. It’s important to evaluate your financial goals, investment horizon, and risk tolerance before making any investments. Speaking with a financial advisor can also assist you in making well-informed choices and building a portfolio that is balanced and meets your specific goals.

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A mutual fund (MF) is an investment tool funded by shareholders that trades in diversified holdings. It is a professionally managed investment fund that pools money from many investors to purchase securities and in return it charges a small fee to manage the money.

These investors may be retail or institutional in nature. Mutual funds have advantages and disadvantages compared to direct investing in individual securities.

Mutual funds are an ideal investment vehicle for regular investors who do not know much about investing. Investors can choose any mutual fund scheme and can invest on them based upon their goals.

Direct Plan Vs Regular Plan of Mutual Funds

Almost all mutual fund schemes come with two plans – direct and regular. Effective 1 January 2013, all asset management companies (AMCs) launched direct mutual fund plans for all open-ended schemes. Before 2013, only the regular plans were available.

A regular plan for mutual fund is meant for those who invest in a fund through their distributors. These plans, therefore, come embedded with distributor commission that gets deducted from your fund’s valuation before arriving at its net asset value (NAV).

There are many investors who wanted to invest on their own, so SEBI (Securities and Exchange Board of India) intervened in the matter and asked all the fund houses to come out with direct plans. The direct plan bypassed distributor commission and also its expenses are lower than those of the regular plan.

How to invest in Direct Plans?

Investor can go to every fund house’s website, can create account to register there and can invest in the direct funds. Other way is to go to Mutual Funds Utility, the mutual fund industry’s platform to invest across schemes, after opening an account there. There are various portals available which offer direct plans to invest in which may charge a flat fee.

Types of Mutual Funds in India

As per SEBI, there are 4 types of mutual funds available in India-

1. Equity mutual fund

Such type of category invests directly in stocks which can give returns based on the Stock market performance.

2. Debt mutual fund

Such schemes invest money in debt securities which are safer than the equity mutual funds and provide moderate returns.

3. Hybrid mutual fund

Under this category, money is invested in a mix of equity and debt.

4. Solution-oriented mutual fund

With a mandatory lock in period of five years, money is invested for particular solutions or goals like retirement and child’s education.

Must Read Conclusion on Direct plan vs Regular plan

Since there is advantage that you can save a lot of commission or other charges in direct investment plans of mutual fund and can get sizable return over a period of time but biggest drawback of this method is that you will have to complete the formalities, do the research of mutual funds, monitor your investment all by yourself. It is good investment option if you know all above ups and downs of the market.

Through direct plan, you would not be able to get the recommendations provided by the experts since market is full of mutual fund investment plans and it becomes very crucial to decide by yourself in term of direct plan vs regular plan whereas in regular plan on mutual fund investment, you would be able to get expert insight on any fund.

Investment service is another consideration where your advisor will provide services either quarterly or half yearly and also will review your investment periodically in regular plan whereas it is not possible in direct plan vs regular plan.

So, in all if you have sound knowledge about your portfolio and can manage it in all ups and downs then direct plan is good other go with regular plan.

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SIP refers to Systematic Investment Plan. It is a plan that works on a systematic approach in a quest to save money. It is a plan that will allow an individual to invest their money into mutual funds so that it helps in accumulating a large sum which is accrued for fulfilling your needs in the future years to come. With a SIP, you can invest your money which is predetermined into the mutual funds at regular intervals like quarterly, monthly, weekly, etc.

The money deposit for the investments has to be made again and again at certain intervals, regularly. One invests in the systematic investment plan in accordance with their monetary needs that they need to achieve by saving their money by investing in the SIP – systematic investment plan. The investor can choose the interval periods that you want to invest through. Once the investor starts investing into the SIP investment plan, the amount of the investment money will be automatically debited from your account which you had registered with and invested into the plan. This money will be invested into a mutual fund scheme that the investor has chosen. After that, the investor is given a certain number of units which are based on the market rate; this is called the NAV or the net asset value. It works in a way that each time your money goes into the investment amount, more units of the scheme will be added to your SIP account. Now, that you know what SIP is, let us discuss how to invest in SIP online!

Steps to invest in SIP Online

How to invest in SIP online is a very simple question to which the answer is long but very easy if you follow the steps carefully. The answer to how to invest in SIP online is given below:

• The first step to take if you want to invest in a systematic investment account is to finish the process of KYC. KYC stands for Know Your Customer. In this, the potential investor or the customer will be asked for their information in detail. Information like their name, cellular phone number, address, date of birth, and other things helpful in knowing the customer are asked for. KYC is a compulsory step to be done before the investor plans on investing into SIP mutual funds. This process can be done on any KYC registration agencies or websites. Another very important thing to know about this is a step which will require lesser time in being a KYC complaint. It is possible by linking your Aadhaar card to the KYC account or website. Linking your Aadhaar card will give the KYC account all the information related to customer’s details by taking the required information from the UIDAI – Unique Identification Authority of India.
• Uploading your documents is the next step in the process of investing in SIP online. The investor has to upload their documents for verification. The KYC will require the investors to scan and then upload their PAN – permanent account number card details onto the website.
• No process can be completed without verification. Now, the investor will be verified through a video call process. This is called IPV: In – Person Verification which is done online. The fund company will ask the investor to select a suitable date and time when the video call would be possible without any hindrances and connect with them through a video call through the webcam. During this video call, the investor might be asked to provide them with a view of their PAN card and address proof, so they need to keep them handy in case that happens.
• The next step in investing in systematic investment plans is to make your account. The investor has to go to the fund website and open the registration link to make a new account.
• Entering your bank details is the next thing to do in the process of starting your systematic investment plan online. The investor has to enter the bank details onto the website after the account has been made.
• The next step the investor has to do is to verify their account with an OTP – one-time password that they will receive on their cellular device through SMS or on their email IDs.
• Now, the account is created. The next thing to do is to log into the account.
• Now, the investor has to make the certain selection for the investment process of SIP to start, the selections have to be made on the date of the SIP and the mutual fund scheme that the investor is choosing to invest their money into.

Once the SIP – systematic investments plan account has been opened online, you can start investing through online mode.

What to do after KYC?

How to invest in SIP online after completing the KYC is very simple! After you have become a KYC complaint, what you need to do, as an investor, is that you need to go to the fund company’s website that you want to invest in. Go to the link that reads as “register now” or “new investor”. Find the link and open it. Now, the investor will get a form that they have to fill up. Basic details have to be filled. A username and password have to be selected and generated so that it can be used for online transactions. Bank account details of the investor also have to be entered into the form. Then, the investor has to select an amount for the monthly debt that the bank account will transfer to the mutual fund company for investing in it. This is called auto-debit. Then, the investor has to log into their account with their new username and password and then they have to select the mutual fund scheme that they want their money to be invested into. Then, the dates for the money to be invested have to be chosen. The dates can be in accordance with the ease and the convenience of the investor. The SIP plan will start running after a period of 30 days to 40 days after the process has been finished.

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SIP stands for Systematic Investment Plan. It is basically a systematic approach in terms of saving money.

What is Systematic Investment Plan (SIP)?

It is a plan that allows one to invest their money into mutual funds so that a large sum is accrued for fulfilling your needs in the future years to come. With a SIP, you can invest your money which is predetermined into the mutual funds at regular intervals like quarterly, monthly, weekly, etc.

A small amount of amount is invested in a systematic investment plan in the market. The deposit has to be made again and again at certain intervals, regularly. One invests into the systematic investment plan in accordance with their monetary needs that they need to achieve by saving their money by investing in the systematic investment plan. You can choose the interval periods that you want to invest through. Once you start investing in the systematic investment plan, the amount of your investment money will be automatically debited from your account which you had registered with and invested in the SIP. This money will be invested into a mutual fund scheme. After that, the investor is given a certain number of units which are based on the market rate; this is called the NAV or the net asset value.

It works in a way that each time your money goes into the investment amount, more units of the scheme will be added to your SIP account.

SIP allows you to save regular and continuous savings you can calculate through any SIP calculator. You are committed to saving at regular intervals so that a good and huge amount can be accrued in a time period so that it can be used later. It can be more useful if the Systematic Investment Plan with a purpose of long-term investment plans. The SIP is very flexible in terms of the investor having the control over whether they want to continue or discontinue the Systematic Investment Plan (SIP), at any time. The investor has superpowers over the Systematic Investment Plan that they invest in as they are the ones who have the power to decide if they want to decrease or increase the amount of investment. It is super easy as well in terms of regular investments. There is absolutely no problem if you forget to make the payments as you can give your bank an instruction to auto-debit the investment amount from your account during every interval. The returns from the investments that you make into SIP are pretty good because of the rupee – cost averaging.

Five Step Guide to Systematic Investment Plan (SIP)

1. Figure out why and how much you want to invest

The most important thing before you invest into the SIP is to figure out your risk appetite. How much can you afford to invest in mutual funds that do not have a 100 % guaranteed return! Assess your risks carefully and then understand why you actually want to invest and what is your purpose of doing so. If you know why to want to invest and how much you want in return, it will help you to invest the amount closest to what could be appropriate for the returns that you are looking to get.

2. Mutual Fund

Many mutual fund schemes are available for you to choose from to invest your money into. The risk appetite helps a great deal in settling on a mutual fund scheme(s) to invest into. Before you select a mutual fund, asses the performance of that scheme for the past few years to see how good their returns have been in the current economic situation.

3. How to invest in SIP?

• • • The first step is to fill up the SIP application form.
    • Then, submit a cheque for the SIP amount for the month (offline)
    • Or, fill up your ECS form (online).
    • Submit a canceled cheque
    • Give your Residential proof
    • Submit your KYC form

4. Select your dates and duration for SIP

As you already know that the money you are investing into SIP can get auto-debited from your bank account, you will need to select your dates for the money to be deducted from your account and invested into the mutual funds. Most of the firms offering investment options into SIPs offer the following dates: 28^th, 20^th, 15^th, 10^th, 5^th and 1^st. As an investor, you can calculate the amount of money that you need to fulfill your future goals and requirements like your child’s education, building a house, etc. After you calculate the amount that you need to accrue, then deciding on a time period that will be your duration for the SIP is easy.

5. Online or Offline? And till when to stay invested?

This is an important decision to make. There are both options available for you to choose from which offers you the choice if you want to invest in the SIP online or offline. You do not have to go through the hassle of remembering the dates for the transfer of the money to be invested into your SIP account as the plan works on the basis of auto-debiting. So, even if you forget, your money will automatically be invested every month or year, whatever payment mode you choose. Also, it is the best to stay invested in your SIP for the time that you have decided upon by selecting the duration as a SIP is designed in a way that it gives maximum returns through long-term investments.

Conclusion

Follow these 5 golden steps to your Systematic Investment Plan to invest online in SIP and have an easy long-term investment with high returns without the worry of getting reminded every time to pay your investment money as it is an auto – debit plan.

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Proper Tax Planning not only reduces the amount of Income Tax that you are liable to pay but it also encourages you to save and invest your money so that you can fulfill your financial goals. There are a number of ways by which you can minimize the burden of Income Tax on you.  Here you will find the best five investment options for saving tax.

1. Equity Linked Savings Scheme

Equity Linked Savings Scheme or ELSS is considered as one of the best Tax saving options in terms of returns, liquidity, transparency, and taxability of income. The average returns from the ELSS category in last three years have been around 17.8%.

There is quite a high amount of risk involved with ELSS funds. But if you look at the long-term picture of 3 to 5 years of investment, you will find that ELSS funds have outperformed any other investment instruments in the market.

ELSS, however, is not the best option for everyone. Retired taxpayers, for instance, should prefer other tax saving instruments over ELSS. The best option for them is to invest in senior citizen saving’s scheme or in immediate Annuity Pension plans as there is less risk involved with them.

2. Unit-Linked Insurance Plans

Unit-Linked Insurance plans or ULIPs are the second best Tax saving options after ELSS. It has given 9.8% returns in the past three years. ULIPs are insurance cum investment products offered by Life Insurance Companies. They are cheap and offer greater flexibility to switch between funds.

All reputed Life Insurance providers in India offer ULIP products. The best part of ULIP products is that it offers life coverage. In case of the policyholder’s death, a ULIP pays out the sum assured to the nominee chosen by the Life insured.

Being market-linked products, ULIPs also involve certain amounts of risk. But if you have a good understanding of market timing, you can switch fund from equity to debt or vice versa. Moreover, you can enjoy absolute tax exemption under section 10(10d).

3. National Pension Scheme

National Pension Scheme or NPS is the third best tax saving options in our list.  NPS has become more attractive among taxpayers after the budget 2017-18 as it has offered an additional tax deduction of Rs. 50,000/- . Moreover, the fund managers are now allowed to invest more and more in stock which is expected to give better returns.

In the last three years, the NPS returns have been 9.5% which is quite an attractive number for encouraging more investment in this scheme.

The only downside of NPS is that the annuities you receive after the maturity of the scheme are taxable. However, requests have been made and the Government is considering income tax exemption for NPS annuity income.

4. Pension Plans

Retirement plans are the best tax saving options for you if you are on the verge of retirement. Pension plans allow you to save for your post-retirement life.  It allows you to maintain a regular flow of income while providing comprehensive life cover.

Pension plans are good investment option as shows the last three years’ return rates. Pension plans can get you 7% returns, if not more. Moreover, you can enjoy tax benefits and other benefits by investing in a pension plan.

The only problem with Pension schemes is that they are expensive. So if you want a cheaper option, go for mutual funds. Pension plans launched by mutual funds are cheaper than those offered by Insurance companies.

5. Child Education Plans

If you are concerned about your child’s higher education, you should invest in a child plan. Child education plans offer risk coverage on the life of the child while bearing the cost of his or her higher education.

Child education plans guarantee that your child’s education never gets hampered in case of any unfortunate event in the future. If you die before the completion of the policy, the insurer will pay all future premiums on your behalf till the date of maturity.

Child education plans are offered by most of the life insurance providers in India. Though many people are of the opinion that insurance plans are not good investment options in terms of returns, but child education plans are worth investing because of the benefits they provide.

There are a lot of other options where you can invest your hard earned money. But in our opinion, the ones discussed above are the best investment options that you can consider for growing wealth as well as for saving tax.

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Business owners have many opportunities and options for investment but their appetite for risk or returns should be carefully considered.

What do they want to accomplish with short term investments? Small business, before investing, should always determine the answer to these question.
The two most popular and reasonable answers to these include-

• Preserving cash flow for the future of the business
• Generating more capital quickly for the business.

Short Term High Yield Investments

Generating moderate returns and an exquisite means of storing funds, low-risk investments may contribute these pros in a small business. While high-risk investments aim for cash reserves. In high-risk investments, the main idea is to focus on the cash reserves for the future and ongoing cash flow and increase it with time or in the longer run.

While the best short-term investments always vary for small businesses, it is important to know the options that one has. For many businesses, it is better to invest cash than keep it idle in the reserves for later use. Hence the risks and returns should always be considered in best short-term investments.

Best Investments in India

Starting a business and growing it, is no cake-walk. It takes time, effort and money to run a business. While you can put all your time and money in your business, money is something which is not all yours and not all sufficient. You should have a cash flow for your business to keep running and growing and should Know your best short term investments.

There are so many businesses in the world which bust in their first year due to lack of money. Hence, investing in a small business and investing correctly is the key to a sustainable cash flow. For the same, you have to be aware of these Investments examples, short-term high yield investments, short term investment options with high returns, best short-term investments for small amounts of money, short term bond funds, best short-term stocks, best short term investments 2018.

Short Term Investment Options with High Returns in India

Here are a few tips on how to get started as a small business:

• • Apply for a business loan
  • If the loan is not sanctioned or the business idea is unconventional, use a crowd-sourcing website to invite investment.
  • Apart from the crowd-sourcing, other options for getting financing is: The governmental scheme, venture capital or private equity funding.

All businesses need a capital to work. This capital is used to various things including but not limited to employee payroll, research and development, paying the bills, and more. If there is no working capital the business is sure to get doomed.

Hence you should always know the best short term investments for a small business.

Best Short Term Investments For Small Amounts Of Money

1. Invest in Assets

A good long-term investment is that of property and assets are property which belongs to you. You can also build your warehouse with the assets. With time, the value of a property increases and after say 10 years, you can always sell the property if you want, and get your money back. You should also consider your cash reserve options before investing in it.

2. Mutual Funds

A fund manager manages mutual funds. These are good examples of investment for people with no experience.

3. Exchange Traded Funds

Exchange Traded Funds (ETFs) are similar to mutual funds except for the fact that rather than focusing on individual stocks you are focusing on an index of stocks. ETFs can be bought from brokers.

Short Term Investments Minimize Your Outgoings

Returns on an investment vary from day-to-day basis. Depending on multiple factors including the current world economy the price of your stocks, assets and investments may go up and down. It is a good idea in this case to educate yourself about the finance industry a bit, and before a stock goes down, save your portfolio from crashing by taking the required actions.
Once your investment portfolio looks good, you can also look at ways to reduce your business taxes and control other outgoing expenses which ultimately help in a stronger cash flow of the company.

While there are a plethora of options available to choose from for best short term investments, nobody can be sure on which one works the best for whom. You have to be ready to take risks and try your hands at investing.

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Financial year FY 2018-19 started and the new budget brought some changes to income tax laws for this year. We must be aware of these changes and should plan our taxes and investments accordingly. There are some relief points and some pains in this Budget. Let’s see the top 10 changes Budget 2018 made & all of these changes are applicable from April 1, 2018.

1. Transport Allowance & Medical Reimbursement not Tax Exempted

The Transport Allowance & Medical Reimbursement are no longer tax free. Currently the transport allowance was tax free up to Rs 19,200/- and medical reimbursement up to Rs 15,000/- so free from submitting above bills to the employers.

2. Standard Deduction of Rs. 40,000/- for salaried persons

A standard deduction of Rs. 40,000/- for salaried tax payers as well as for pensioners too. This deduction can be availed without submission of any proofs.

If point #1 is considered and subtracted from this deduction then there would be additional Rs. 5,800/- tax exemption for the salaried persons.

3. Cess hiked to 4% and named as Health and Education Cess

From FY 2018-19 the existing Cess of 3% (Education, Secondary and Higher Education Cess) has been increased to 4% and named as Health and Education Cess.

4. Reintroduction of LTCG on stocks and equity based mutual funds

Budget 2018 has reintroduced long term capital gains (LTCG) tax of 10%+Cess (i.e. 10.4%) on gains made of sale of equity or equity oriented mutual funds. To qualify for long term capital gains the stocks/mutual fund should have been held for at least 1 year. Capital gains up to Rs. 100K are tax free.

5. Dividend distribution tax on Equity mutual funds

The dividends from equity mutual funds would attract dividend distribution tax of 10%. However the dividend received would be tax free in hands of investor. This will affect schemes that were distributing dividends as a strategy.

6. Increased tax exemption upto Rs. 50,000/- on interest income for senior citizens

As per New section 80TTB, senior citizens would be able to claim interest income up to Rs 50,000/- as tax exempted income.

7. Tax deduction for Single Premium Health Insurance Premium

If you buy single premium health/medical insurance policy covering multiple years say for 5 Years then the  the tax exemption u/s 80D would be available proportionately for all the years.

8. Long Term Capital Gains Bond only eligible for capital gains from property

The long term capital gains tax exemption by investing in long term capital gains bond from specified companies (NHAI, REC or PFC) u/s 54EC would only be available for capital gains from sale of property including land, residential or commercial building.

9. Tax exemption on NPS for the Self-Employed

Till now, employees contributing to the National Pension System (NPS) were allowed to withdraw up to 40% of the total corpus without any tax at the time of maturity or closure of the account. The same benefit has now been extended to self-employed subscribers.

10. Senior citizens get Rs 20,000/- additional deduction on health premiums

Senior citizens will get a deduction for health insurance premium under section 80D of Rs 50,000/- up from Rs 30,000/- last year. There is also a hike in the deduction limits for medical costs on specified critical illnesses from Rs 60,000/- – Rs 80,000/- for senior citizens and Rs 100,000/- for very senior citizens who are 80 years and above.

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