We have all heard of the term Mutual Fund Investments. We know it involves the stock market, buying and selling of shares and earning returns to investment. But to a layman, the question remains, what is Mutual Fund? To put it in simple words, it is the amount of investment that is often collectively made by a Non Banking Financial Institution from individuals, firms and companies and is invested in the shares of different companies in the stock market. The NBFC usually has a team of experts who analyze the market conditions and invest accordingly to provide the investors with maximum possible gains.
Still confused? Well, the key benefits of Mutual Fund investments, apart from earning profit or capital gains, is that it helps to evade tax on savings. If you keep your money in the bank as savings or as salary balance the taxes are applicable on this amount of money. If the same amount is invested in the stock market, in most cases of capital gains, the taxation, if at all, is lower. One can invest any amount, for any stipulated time period, for mutual fund investments. The Investment Banks act as the middlemen between the investors and the shares. One does not need to take the pain of checking and reinvesting their shares everyday as a team of experts may do it for you.
Mutual Fund Investments are now a very popular income among the youth as well as the lower earning groups with nominal savings. The nominal savings can be multiplied in the share markets with the help of NBFCs via Mutual Fund Investments. These market risk oriented schemes are attractive to evade some amount of taxation and also multiply your savings. What more, the flexible plans allow the investors to opt out of investment with their returns any time they want to quit. Mutual Funds are thus one of the top investment options in the world now a days.
