April 13, 2024

Business Bib

Business & Finance Blog

How mutual fund is considered as the best options for steady income? 

3 min read

People explore different options for investment. It is always a thought process that to earn steady and safe income through investment. People often ignore mutual fund as they are more drawn towards conventional investment options like PPF, FD, NSC etc. However, the mutual fund has found out to be one of the most stable sources of investment with healthy returns. You must be wondering, how the mutual fund can be so steady? Let us see

  1. Disciplined investment

We know good habits lead to something good in our life; it goes the same with investment. Through SIP, i.e. systematic investment plan you start investing in mutual fund regularly. A certain amount will be invested every week or month for years. This regular investment becomes a habit that will continue for years. Note that this investment will go on along with your other expenditure, so you don’t have compromise the amount. This way you can ensure substantial returns in the future.

  1. Healthy returns

There is a reason people opt for the mutual fund as it offers healthy returns. It is true that there is a risk involved in it however with proper study, you can get higher returns. It has been observed that debt funds beat FDs whenever it comes to profits. If you have an average risk appetite and want a higher yield, then equity mutual fund can a great way due to its diversified portfolio. The financial history suggests equity funds have delivered around 11-15% returns in the last ten years.

  1. Lock in period

Almost all traditional investment options come with a mandatory lock-in period. These lock-in periods make hard for the investor to redeem the amount at the time of emergency. Equity-linked Saving Scheme (ELSS) has a short lock-in period of three years. ELSS is helpful as it has short lock-in period but the financial experts recommend not to redeem the fund until the financial goal has been fulfilled.

  1. Convenience

As we know through SIP, we get disciplined investment it is also true that SIP brings convenience in investment. For a beginner who cannot invest a lump sum amount, SIP is convenient. Like we know, a certain amount is debited automatically every month which means you don’t have to pay attention toward the payment. It is comfortable and hassle-free.  

  1. Professional management

Fund manager professionally manages the mutual fund as his job is to keep track of the market and manage the investments. These fund managers spend hours on analyzing as when to buy a winning stock and when to sell. The money invested in the mutual fund is highly secured and transparent as SEBI governs it. You can be very well assured that your fund is safe will reap higher returns.

The mutual fund has been a favorite choice of investment of investors. When it comes to the mutual fund in India, you will find different fund houses with excellent track record where you can start your investment. With all these qualities mutual fund is undoubtedly a reliable form of investment.