Investment: Types of Mutual funds

There is a lot of mutual funds for the investors to choose from. Investors can choose from the lot ranging from low risk to high risk funds.

Investors have the option to select any of the funds or diversify their portfolio with more than one fund. Once invested, the fund manager takes the job of investing the money in the stocks alloted for the fund.

Large cap fund is the least risky fund while small cap fund is the most risky one. Mid cap fund is also available for investors who are not willing to take too much risk. Multi cap fund is the combination of large, mid and small cap stocks, in addition to the fund with combination of investing in shares and debt instruments.

Apart from the above funds,  index funds, sectorial and thematic funds, liquid and debt funds are also available for investors to invest their money. 

Investment: EPF and PPF

We can invest in EPF and PPF.

EPF or Employer's Provident Fund is directly deducted from employee's salary. Employer also contributes to the EPF. A part of the employer's contribution goes to pension scheme. Since employee and employer contribute equally to the fund, it is the best investment for the investor looking for wealth accumulation with fixed return.

PPF or Public Provident Fund is contributed voluntarily by the investor who is investing  for long term and looking for secured return. PPF can be opened at any bank or post office with the facility and can be transferred to any bank or post office.

EPF and PPF are safe investments.

Investment: Fixed and recurring deposits

The amount saved for six or more months should not be kept in saving account.

We should convert it to fixed deposits. It is easy to break the deposits as and when there is any emergency and the fund is required.

We have an option of sweep-in and sweep- out wherein the excess money is automatically converted to the fixed deposits. The last deposit is broken if there is any withdrawal.

Recurring deposits can be initiated where a fixed amount is deducted from the savings account and credited to recurring deposit account every month on a scheduled date for a certain period.

The principal amount along with interest is credited to the savings account on maturity of both fixed and recurring deposits.