Invest in Mutual Funds

A mutual fund is an investment scheme that pools money from many investors which is further invested by a professional fund manager. The fund manager can invest this pooled money to purchase securities like stocks, bonds, gold, or any combination of these. Every mutual fund works around certain investment objectives and attempts to achieve the same. The fund manager plans the investment accordingly and allocates the asset between stocks and bonds. Combining all, these securities form the portfolio composition of the selected scheme.

The first and foremost step is to decide on how much risk you are willing to take and investment tenure. Once you decide this, you can easily select the best mutual fund for you. At Groww, you can select from different categories of mutual funds such as high return, tax saving, top companies, and much more.

There are two ways of investing in mutual funds - via a systematic investment plan (SIP) or investing through a one-time lump sum method. The primary difference between the two is in a lump sum you have to invest the whole amount in one go and in SIP, you can invest in a mutual fund at fixed intervals such as monthly SIP.

You can either use the website or download Groww mobile app to start investing in mutual funds on Groww.

The account opening process is completely free and paperless at Groww. If you have all the necessary details in place, it takes just 2 minutes.

Groww charges a 0% commission on MF investment. You can freely choose from over 5000+ direct mutual funds and start your investing journey anytime.

Yes. For tax purposes, mutual funds are segregated into equity-oriented and debt-oriented. If the investment made in equity-oriented Mutual Funds is for less than 12 months, you have to pay 15% tax on returns. For any duration exceeding that, you will have to pay 10% on gains exceeding ₹1 lakh. Furthermore, if a fund's exposure to stocks is less than 65%, capital gains will be as per your tax slab if the holding period is less than 36 months. If the holding period exceeds 3 years, capital gains are taxed at 20% after the indexation benefit.

Mutual funds offer returns to their investors’ returns in two forms - dividends and capital gains. Dividends are paid out when the company makes profits (if any). If the company has performed really well and is left with surplus cash, it may decide to share the same with investors in the form of dividends. Thus, dividends are rolled out to investors proportional to the number of mutual fund units held by them. A capital gain is the profit earned by investors in case the selling price of the security held by them is greater than the purchase price. Both dividends and capital gains from mutual funds are taxable.