Saving less is not a problem, lack of awareness about mutual funds is. Because with SIP one can start investing with as low as INR 500 and gradually increase their investments as and when their income grows. In fact this is one of the advantages of mutual funds that anyone with a meager amount of savings can start investing and enjoy the returns of stock market by taking this route. So don’t hold tight and start investing today!

A general myth which is widely believed among investors is that lower NAV funds will buy you more units, so the overall returns will also be more. However, higher or lower NAV does not determine the returns of a fund. INR 1,000 invested in INR 50 NAV will buy 20 units, and the same amount invested in INR 100 NAV will buy 10 units. But 20% return in both funds will result in same increase in value; irrespective of initial NAV. NAV is only used to compare its past performance with present. The increase or decrease in NAV shows the positive or negative returns generated by the fund.

Stock market by and large has proved to be the one of the highest yielding investment options in long term. Mutual funds through the route of equity and debt investments help one generate wealth over the years. Mutual funds seek to diversify and encounter stock market volatility by continuously monitoring the portfolio and reallocating the investments over various stock options available in market. With high returns comes high risk attached, but the fundamental factors should reward the investor over long run. Investing through SIP in mutual funds helps to overcome the volatility, and the need to time the market is eliminated.

A fund’s performance depends on a lot of factors and past performance does not guarantee future performance of the fund. Many investors make the mistake of choosing funds solely on the basis of the last one or two year returns the fund has generated. But the performance of funds depends on various factors which the investor should consider like the AMC’s track record, fund manager’s consistency of generating returns, risk adjusted performance, NAV volatility etc.

The reality is exactly opposite! Yes, you read it right. If you think that you need expertise in investments or stock market to invest in mutual funds then you are wrong. Mutual funds allow investors to grow their wealth and enjoy good returns, irrespective of their market knowledge. Let your distributor suggest you funds based on your risk appetite and future goals, and once you invest you just need to sit back and hold tight as your money is managed by experienced fund managers and analysts who follow a professional approach towards managing money of thousands of investors like you.

These funds are rated on the many factors including the consistency of their returns, risk adjusted performance, NAV volatility, fund manager’s performance etc. These factors are subject to change and it is possible that a fund which is 5-star rated may have a 3-star rating two years ahead. Though the rating gives an overall idea about the scheme, the same cannot be baked upon completely.

One of the mandatory things for MF investments is KYC compliance, and not Demat account. Demat is beneficial but not compulsory. One can start investing in mutual funds by opening an Online Investment Account in less than 5 minutes with RBL Bank and start investing on Invest First, our online investment platform. It will allow you purchase, switch, redeem your investments without any additional charge. You can also view and download portfolio reports and track investments on a single platform.

Here “someone else” is one who is an industry expert working with his experienced team with the common objective of creating value for their investors’ money and appreciating the value of assets which they manage. One of the greatest advantages of mutual fund is professional management of money. These experts study the market and stocks on regular basis and their investment decisions are backed by in-depth research. These professionals help you tame volatility of individual stocks and diversify the portfolio in order to minimize the risk and maximize the returns.

Some investors think that investing in all mutual funds will lock their money. But that’s not completely true! Open ended mutual fund schemes can be redeemed and withdrawn any time as per the investor’s convenience. Generally, mutual fund companies charge an exit load of 1%-2% if the investments are redeemed within a year. Whereas, close ended mutual fund schemes (except ELSS, solution oriented schemes) which have a lock-in period for redemption of investments, are compulsorily listed on stock exchanges to provide investor the facility to exit the scheme.