Frequently Asked Questions (FAQs)
1. Which type of mutual fund gives a higher return?
Higher returns come at the cost of high risks. Thematic funds can offer the highest returns but as they primarily invest in a single sector or theme, they often feature a high degree of investment risk.
2. Which is better - FD or mutual fund?
FD and Mutual funds are very different investment options. Fixed deposits provide assured returns, but the rate of return is often quite low. Mutual funds, on the other hand, typically offer inflation-beating returns, but returns are not guaranteed. So, neither can be called a better investment and the choice depends on the investor’s goals.
3. Can an investor get monthly returns on investment in mutual funds?
Systematic Withdrawal Plans allow an investor to withdraw funds from the invest annually, semi-annually, quarterly, and even monthly. They do not grant interest to the investor. They are the opposite of a systematic investment plan (SIP).
4. Which type of mutual fund is considered ideal for beginners?
In most cases, new investors are seeking long-term growth of their wealth, hence equity mutual funds are considered to be the ideal option. Alternatively, if a new investor is seeking tax saving investment option, then ELSS tax saver mutual fund might be the better investment option.
5. How much can I invest in a mutual fund?
There is no upper cap on how much one can invest in mutual funds. Investors can choose to invest either via the lump sum investment route or the SIP (systematic investment plan) route. However, cash mutual fund investments are limited to Rs. 50,000 per investor, per mutual fund per financial year.
ARN No: Jan23/Bg/1A