A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.
Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.
The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.
Is it safe to invest in mutual funds online?
Do you remember the first time you boarded a flight? Did you have butterflies in your stomach or a feeling of nausea? Finally, when the flight was air, didn’t you feel reassured? Flying at 30,000 feet, seat belt fastened and a warm cabin crew along with a pilot capable of taking care of you.
Investing in mutual funds online is no different from that first flight. While you may initially be concerned about where your money is going and whether they have reached the intended recipient, the online investment mode is as safe as any other mode. Online payment platforms are protected with the necessary encryption protocols so that your personal and financial data cannot be exploited during data transmission.
The online process is much more convenient because you can access all your transactions, buy or sell at any time and see how your wallet is doing. When you invest online, your money is credited directly to the mutual fund account and adds your units that you can see by logging into your account. So, safety and convenience aside, online mode gives you transparency too similar to offline mode. Your money is safe in the system!