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.
What’s the easiest way to get started with mutual fund investing?
Just as opening a bank account requires some paperwork at first and then you can use all its services smoothly, investing in mutual funds also offers a similar experience. The basic requirement to begin your common background journey is to complete your KYC by submitting the necessary documents for verification. Once the KYC is complete, you can invest in any mutual fund for any amount at any time.
KYC is a one-time process that holds the key to the world of mutual funds. It makes your entry into any mutual fund seamless and you can do all this from the comfort of your home once KYC is verified. Now, you can also opt for a fully online e-KYC. But e-KYC limits your investments to Rs.50,000 per year per house fund.
After completing the KYC verification, you can invest in any mutual fund with ease through a distributor or directly. You can withdraw your money at any time by submitting a refund request with the Mutual Fund and the money will be credited directly to your bank account in 3-4 business days. In fact, you can now do most of your transactions such as investing via SIP or lumpsum, selling, and switching between schemes online from the comfort of your own home.