Yes! Even for an investor with modest savings or small beginnings, Mutual Funds are an ideal investment vehicle.
Almost every individual investor, small or big, having has a Savings Bank (SB) account and anyone with that account can start investing in Mutual Fund schemes. With amounts as low as ₹ 500* every month, Mutual Funds promote the habit of regular investing.
Other benefits for a small investor in Mutual Funds are-
- Ease of transacting: Investing, reviewing, managing and redeeming^ from a Mutual Fund scheme are all simple processes.
- Get full transparency: Maximum transparency, clear disclosures, and timely statements of accounts are all that a small or first time investor looks out for.
- Professionally managed: You can build a diversified portfolio that is professionally managed by Fund Managers, who back their decisions with thorough research.
- Every investor is equal: A Mutual Fund gives the same investment performance to an investor who has invested ₹500 or one who has invested ₹5 crore. Thus, it has every investor’s interests in mind – small or big.
- Liquidity: Unlike investment options like real estate, it is very easy to redeem Mutual Fund investments when in need. You can redeem the MFs with the Fund house directly or sell in the secondary market.
Every investment comes with its risk. Mutual Funds too involve investment risks like trading volumes, liquidity risk, etc. But they also offer a wide array of benefits to small investors.
No matter how small the starting amount or modest the objectives, Mutual Funds Sahi Hai.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
*Minimum investment amount: A lot of MFs allow a minimum SIP of Rs 500. However, some schemes may need a higher amount during the investment application.
^Lock-in period: Mutual Funds can have a lock-in period. Investors can redeem their investments only after the lock-in period ends.