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How to invest in mutual funds?

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2 Approved Answers

Shikhar

Investing in mutual funds is very easy thanks to the availability of online options like Groww.

Steps to invest in mutual funds:

  1. Log in to your Groww account. Sign up if you don't have an account.
  2. Upload necessary documents like address proof, PAN card, and bank details.

Now comes the part where you choose a mutual fund to invest in:

  1. Determine the duration for which you want to invest your money.
  2. Determine the level of risk you are willing to take with your investments.

Once you've chosen a mutual fund to invest in, you need to decide if you want to invest via lump sum or via SIP.

At the mutual fund page, click on 'Invest One Time' to invest lump sum or click 'Start SIP' to invest via SIP.

Your mutual fund purchase will reflect in your Groww account in 3-4 working days.


Arpit Chandak

A mutual fund is a pool of investments in which several investors deposit in their money and the fund is managed by the professional fund managers. The fund managers then invest your money in various debts, equity and other securities.

To start investing in mutual funds, you must be a KYC (Know your customer) compliant. This is a onetime process and for this, you will have to submit basic details and documents such as PAN card, address proof, photo, etc. Being a first time investor, you should be clear with your investment objectives. There are various types of funds available to invest in. Depending on the risk appetite and expected returns, you can choose the funds which meet your investment objectives.

We would recommend you to start your investments with Balanced funds and tax savings funds. Please go through the below link to understand the various types of mutual funds:

https://groww.in/questions/what-are-the-types-of-mutual-funds

Before start investing in mutual funds, there are few basic terminologies which you should be aware of :

NAV : It stands for Net Asset Value. Mutual funds are purchased in units and each fund has its own NAV which is decided after the closing of every trading day.  The amount you have to pay to invest in a fund is the NAV multiplied by the number of units purchased.

Exit load : It is the charge levied when you exit the mutual funds. However, there are many mutual funds which do not levy any charge after a certain time period of holding fund.

Expense ratio : These includes the administrative charges levied by the mutual fund company which are deducted from investors returns.

Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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