wealthveda

With the growing inflation rate and falling interest rate, we have reached a level where FDs ROI can’t even match the inflation rate and therefore leading to weaken the purchasing power of common man. It’s not sufficient to keep your savings in banks as the money saved will be taxed and turn into negative growth.

It is evident that banks are shrinking the returns on savings & FDs while closing the possibilities for the people to ever grow in their lives. The impact is leading to play with alternate options to create a decent return. However, there are many options like stock trading, real estate, etc. available but may not suit everyone due to either high risk or high investment. Hence, one needs to ensure a mid-way which is affordable, absorbs risk and encashable, as required.

Mutual Funds – the prima facie alternative to conventional investment has numerous benefits which can easily replace the savings for better returns. Here are a few reasons why you should invest in Mutual Funds.

1. Made for you – Doesn’t matter whether you are novice or expert, risk averse or risk taker, earn little or more, mutual funds are made for everyone. There are over 2000 options to choose from suiting your investment size, time limit, risk parameters, etc.
2. Tax reduction – Though other investment options come with 5-year lock-in period to save tax, mutual funds can give same advantage in much shorter time period. If you choose ELSS, the possibility is much higher.
3. Ready cash – Mutual funds can be redeemed with a click and amount gets credited back to the account within 24-48 hours thereby giving leverage to convert it to cash instantly. Unlike other options with lock-in period or unfavourable selling opportunities, mutual funds are liquid assets.
4. Pay as you like – Unlike any fixed amount, you have the option to either pay one time (lumpsum) or divide it over 12 months (SIP) to suit your capacity. The amount can also vary depending upon your future growth of income and hence yields returns accordingly.
5. Lowest investment – It is one form of investment which can start as low as Rs 500 per month and can be afforded by even students. Hence, this is one brilliant option to select when learning to invest. Low investment can certainly be made without affecting family budget.