Mutual Funds
What is an ELSS (Equity Linked Savings Scheme)?
ELSS is a tax-saving mutual fund that allows investors to claim tax deductions of up to ₹1.5 lakh under Section 80C. It has a lock-in period of 3 years, the shortest among all tax-saving options.
Can I withdraw my SIP investment anytime?
Yes, SIP investments can be redeemed anytime, but some funds may have an exit load if withdrawn within a specific period.
What is Rupee Cost Averaging in SIP?
Rupee cost averaging means buying more units when prices are low and fewer units when prices are high, helping reduce the overall cost of investment over time.
How are mutual fund returns taxed?
Equity Mutual Funds: Short-Term Capital Gains (STCG): 15% (if held for less than 1 year). Long-Term Capital Gains (LTCG): 10% (if gains exceed ₹1 lakh in a financial year). Debt Mutual Funds: Taxed as per individual tax slab (if held for less than 3 ...
What is an Expense Ratio?
The expense ratio represents the annual fee charged by the mutual fund for management and operational expenses. It is expressed as a percentage of the total assets under management (AUM). Lower expense ratios lead to higher returns.
What is the difference between Direct and Regular Mutual Funds?
Direct Plan: Investors buy mutual funds directly from the fund house, avoiding distributor commissions and resulting in lower costs and higher returns. Regular Plan: Investors buy mutual funds through brokers or distributors, leading to slightly ...
What is NAV (Net Asset Value)?
NAV is the per-unit price of a mutual fund scheme, calculated as the total value of assets minus liabilities divided by the number of outstanding units. It changes daily based on market fluctuations.
What is a Mutual Fund?
A mutual fund is an investment vehicle that pools money from multiple investors and invests it in a diversified portfolio of stocks, bonds, or other assets. The fund is managed by professional fund managers, and investors earn returns based on the ...
What is SIP (Systematic Investment Plan)?
SIP is a disciplined way of investing where a fixed amount is automatically deducted from your bank account and invested in a mutual fund at regular intervals (monthly, quarterly, etc.). It helps in wealth creation through the power of compounding ...
What is the minimum amount required to start an SIP?
Most mutual funds allow SIP investments starting as low as ₹500 per month, making it an affordable way to invest.
Can I stop or pause my SIP anytime?
Yes, most mutual fund houses allow investors to pause or stop their SIP at any time without penalties. However, stopping SIPs too early may impact long-term financial goals.
What is an Exit Load in Mutual Funds?
Exit load is a fee charged when investors redeem their units within a specified period. It varies across funds but is typically around 1% if withdrawn within one year for equity funds.