Here are some quick FAQs for the first-time mutual fund investor.

How much should I invest?

First identify your goals; This will help you decide how much you need to invest to achieve each goal.

Should I invest in equity or debt plans?

It mainly depends on your investment objective, investment horizon, and risk profile. If you are investing to achieve a short-term goal that needs to be reached in a couple of years, debt schemes are ideal for you, as these schemes are mostly risk-proof.

However, if you have a long-term financial goal to be reached after about five years, you can invest in equity mutual fund schemes, as these have the potential to deliver higher returns than other asset classes.

What is the minimum amount required to start investing in mutual funds?

It is important to start investing and the beauty of mutual funds is that you can start with as little as Rs 100 per month. The mantra is “start and keep investing for the long term”.

If I start with Rs 100 per month, can I keep adding as my income increases?

If you can. In a mutual fund scheme, you can make additional purchases in the same fund.

Is the Systematic Investment Plan the only way or can I also invest in a lump sum?

It depends on the amount of money you have to invest. A global investment gives more time to invest and results in higher returns as the power of compounding (basically, earning interest on interest) increases over time.

On the other hand, a SIP (the default amount invested on a regular interval) gives you the benefit of Rs Average Cost (RCA), which basically balances out long-term market volatility. Since a fixed amount is invested at regular intervals, you can buy more units when prices are lower and vice versa.

An important tip! /

Since you are new to investing in mutual funds, you should invest with the help of a mutual fund advisor for smooth integration, expert opinion, and careful selection of schemes.

About us!

Nivesh.com is a paperless experience for investors. The platform simplifies the process by ranking funds based on broad investment objectives and additional curation schemes to provide a short list. The goal is to eliminate complexity while ensuring an objective investment process. After initial account creation, investors can transact mutual funds in a few easy steps. After the transaction, the platform helps track portfolio performance with timely alerts and notifications.