Make wiser investments in Gold

Gold funds

“Gold has two significant shortcomings, being neither of much use nor procreative”
-Warren Buffett

One of the most prominent investors of our time, Warren Buffett is known for his advice on investments is telling people to trade in anything but “gold”. However, we Indians love gold and just cannot let it go. It would be hard to find a person who has not invested in gold in one form or another. There are those who buy gold jewelry for different occasions like weddings, festivals, etc., while others look to make a profit.
“Gold is not an investment at all!” said the Vanguard founder and former CEO, John Bogle in an interview with CNN. “Gold is speculation. It has absolutely no underlying intrinsic value,” said the American investor, who is known for promoting Mutual Funds. An investment that only recently became popular among the average investor for its low-cost and high earning schemes.
Did you know that you can invest in gold through Mutual Funds? This investment vehicle collects the money and invests in physical gold without the hassles of storage and low yield. There are two ways you can go about it. One is to invest Gold Exchange Traded Fund (ETF) and the other is to simply invest in Gold Funds. Let’s see how they differ from each other :

 

Gold ETF

Gold Fund

  • Investor trades in the

physical gold through an exchange.

  • A Mutual Fund scheme which invests on the Gold ETF and other related assets.
  • Can be purchased from the stock exchange and requires a Demat account.
  • Can be purchased in Mutual Funds without a Demat account.
  • Gold ETFs are priced transparently based on international gold prices.
  • Gold Funds invest in Gold ETFs and other related assets, their NAVs are dependent on gold prices as well as prices of other assets that funds hold.
  • Gold ETFs typically require a minimum investment amount of 1gm gold which is close to Rs 3,000 at current prices.
  • Gold Funds allow a minimum investment of Rs 1,000 (as monthly SIP).

 

If you were determined to purchase gold, do so with the better investment vehicle. Since Gold Funds are professionally managed, they are preferred over physical gold, even though it holds less liquidity. Using the MyWay Wealth App, any person can trade in these funds with his specific appetite of risk. Explore More on Top Rated Gold Funds

So go for the real gain, not just for the gold!
Think MyWay Wealth!

Gold or Mutual Funds?

Gold or Mutual funds ?

As women, we love to show off our jewelry as they define our social status, lifestyle and earning capacity. Weddings, anniversaries or Akshaya Tritiya, we rush to get our favorite ornament made of gold. Why?
We hear our moms and grandmoms say, “Buy Gold, it would help when you are in need of money”. Meaning, traditionally Gold is not just a piece of jewelry but is considered as an investment.
Then why does the business magnate, Warren Buffett, does not invest in Gold?
He says: “It doesn’t do anything but sit there and look at you.”

They say investments in Mutual Funds fetch better returns. Do I choose Mutual Funds or Gold? Which one’s better?
Let me list down the differences between the two, that will help answer the above question and help you to make the right choice.

 

Investment in Gold

Investment in Mutual Funds

  • Gold is not affected by market conditions.
  • The process of investing gold and managing investments is an individual’s responsibility.
  • Fear of theft or loss of purity is more as Gold is a physical asset.
  • Diversification can happen only if one chooses to invest not just in Gold, but in silver, or other mining products.
  • Value of Gold is more hence the amount you invest in Gold would naturally be high.
  • Gold remains to have the same value unless someone buys it at a higher price.
  • Gold incurs making charges and wastage
  • Mutual funds are affected by market conditions so there is potential to earn higher returns.
  • Mutual Funds are handled by Professional Fund Managers who perform research and guide your investments in Mutual Funds.
  • Mutual funds are invested in stocks, bonds, or Gold ETFs, they are electronic or online investments.
  • Mutual funds provide the option of diversification as it allows investment in bonds, cash, or commodities like gold and other precious metals.
  • Initial Investment in Mutual Funds can be as small as Rs. 500 Read More: Let your money grow
  • Mutual Funds have no such charges, in fact, investment in Direct Mutual Funds don’t even have commission charges.

Does this mean I cannot invest in Gold? No, they are better ways to invest in Gold.

Yes, MyWay Wealth, India’s most trusted app for Direct Plan Mutual Funds, allows you to invest in Gold through Gold Funds, where:

  • There are no making charges, thus it ensures more gold for your money.
  • No Worries about theft and no additional locker is required or safekeeping charges.
  • No purity issues, unlike physical gold
  • You can start investing in gold with as less as Rs. 500.
    Explore: Top Rated Gold Funds
    So switch from Gold to Gold Funds and earn the best returns on your investment.

Start Investing in MyWay Wealth!

Have you started saving for your child’s future?

savings for child's future

“An Investment in knowledge pays the best interest.”
–Benjamin Franklin

Designing and drafting your child’s education can be one of the major goals you will have as a parent. A father always wants his son or daughter to be more educated than him and hence would want to provide them with a quality education. But acquiring a quality education is becoming expensive from the past few years. To be able to provide your child with a bright future, it is necessary to start saving for your child’s education early.

Currently, an Engineering course costs anywhere between 6-10 lakhs in India, but ten years down the lane, it would cost 15-20 lakhs. It is said that there will be a time when global education brands may come to India and their fees will be very high. And obviously, you want your children to get the best of education.
So, here are some ways parents can save for their child’s education:

1. Sukanya Samriddhi Account for your daughter

This scheme was launched by the Prime Minister 4 years ago on 22 January 2015 as a part of the Beti Bachao, Beti Padhao campaign. The account can be opened anytime, by the parents or the guardian, between the birth of a girl child and the time she attains the age of 10 years. It currently provides an interest rate of 8.5%. This scheme encourages young parents to build a fund for future education and marriage expenses. The account can be opened at any authorized commercial banks or Indian Post Office. Only one account per child is allowed. A minimum of ₹250 must be deposited in the beginning thereafter any amount in multiples of ₹100 can be deposited and the maximum limit is ₹1,50,000. Read More on Sukanya Samriddhi Yojana

2. Tax-free bonds

Tax-free bonds are types of financial products which the government enterprises issue. Municipal bonds are one of its kind. They offer you a fixed interest rate and hence is a low-risk investment. They generally have a long-term maturity of typically ten years or more. The interest rate is currently 6.5%.

3. Bank Deposits

  • Savings Account- A savings account can be opened at a retail bank that provides interest of 3-4%. Check: Savings Account vs Liquid Funds
  • Fixed deposit account – A fixed deposit (FD) is a financial product provided by banks which gives investors a higher rate of interest than a regular savings account. Generally, the rate of interest ranges between 5-8%. Explore: What are Fixed Deposits?
  • Recurring deposit Account – This is a kind of Time Deposit provided by banks in India which help people with regular incomes to deposit a fixed amount every month into their account and earn interest at the rate applicable to FDs. Read More: Bank Recurring Deposits

We all want our children to have a bright future. Then why settle at 6.5-8.5% returns when you can earn returns between 12-16% or more and save better for your child’s future? Yes with MyWay Wealth you can invest in Mutual Funds using the option called ‘Save for a goal’ under which you can save for your “Child’s education” which invests your savings based on your requirements.

Requirements MyWay

So, if you want quality education for your children, you have to spend more. And to be able to spend more we should have surplus funds to finance the educational needs rather than sacrificing other requirements. So, don’t take a cut on your returns, instead invest in Mutual Funds and save a large corpus for your child’s future.

Invest Now..Plan Ahead with MyWay Wealth!

MyWay Wealth Weekly Update (Issue #20): India & Mr. Market fight back and more..

“As history has repeatedly proven, one trade tariff begets another, then another – until you’ve got a full-blown trade war”-Mark McKinnon

Early this week the Indian government decided to withdraw the ‘Most Favoured Nation’ status given to Pakistan with a view to facilitate robust and economically favourable trade between the nations. This status was revoked in light of Pakistan’s alleged support to terrorism and infiltration activities against India.

Also, condemning Pakistan’s support to such national threats, the Indian government imposed an import duty of 200%. This essentially implies that anyone buying goods from Pakistan into India would have to pay 200% of the product’s value as import tax. This has effectively result in a steep drop in imports from Pakistan and consequently withdraws meaningful economic support the country received in form of revenues.

Is this economically feasible for India?

Pretty much, yes. A HBL article stated India imports ~$500 million worth of goods every year from Pakistan while India exports goods worth ~$2 billion to Pakistan. This reflects the fact that India makes a net revenue from this bilateral trade that is almost 3x the value of what is paid to Pakistan. (more…)

Choose from various types of Bank Accounts

Bank account

“Do not save what is left after spending; instead spend what is left after saving.”
Warren Buffett

If you have to maximize your returns from a bank, manage money and minimize fees then it is wise to put money into the best account and use the right tools for spending and savings. So, here’s a list of different types of bank accounts which will help you in choosing the best one that fits your needs and circumstances.

1. Savings Bank Account

A Savings Account is a deposit account facility provided by the bank wherein you can deposit your savings. Through banking, you can save money easily and offers facilities to make optimum use of cash. The interest rate provided by the savings bank account is anywhere between 3-4%. Read More: All about Saving’s Bank Account

Advantages:

  • Instead of keeping your money in the checking account, it is more beneficial if you keep your unnecessary funds in a savings account where your money can grow.
  • Liquidity of the savings account and one can withdraw cash during banking hours.
  • Easy and quick access to funds in case of an emergency.

Disadvantages:

  • When there is inflation the account earns no real returns.
  • Balance, including interests in an account above Rs 1 lakh is exposed to the risk of a bank folding up.
  • Also, it doesn’t have any tax advantages and is taxable under the head ‘Income from other sources.

Alternative
Mutual Funds can be the best option to save your income from inflation. Mutual Funds is an investment vehicle that pools money from several investors and invests that money to buy various securities in the market such as stocks, bonds, short-term debt etc. Mutual Funds provide returns between 9-15% or more, which is way more than Savings Bank Account and helps you to face inflation. Read More: Top Mutual Funds that have provide >15% returns.

2. Current Account

The firm, companies, and businessmen who generally have large and regular transactions use current accounts. The current account includes Deposits, Withdrawals, and Contra Transactions. The current account is also called a Demand Deposit Account.

Advantages:

  • A current account is meant for daily transactions. And can handle large volumes of Receipts/Payments.
  • Overdraw Facility – This facility is provided with a current account when an account holder draws more money than what the account holds.
  • A current account is a zero-account (you don’t have to maintain a minimum balance for it.) is generally associated with huge transactions on a regular basis.
  • Direct payment to creditors by issuing of Cheques, Pay- orders, or demand drafts.
    You can do unlimited transactions and withdrawals.

Disadvantages:

  • Minimum balance in maintaining a current account, which is Rs.25,000 is much higher as compared to a savings account.
  • Because of the fluidity that these accounts offer, they don’t earn any interest.
  • Limit on the amount of money that can be withdrawn in a day.

Alternative
Invest your money and do not earn returns? Then why choose Current Account when you can invest the same money Rs.25,000 and receive interest of 12-15% on your money.
You can invest as low as Rs. 500 a month and start a SIP(Systematic Investment Plan) with Mutual Funds. Explore: SIPs in Mutual Funds
On MyWay Wealth you can withdraw your Funds anytime. Hence it provides higher liquidity and you control on your money anytime.

3. Cash Credit Account

A borrower can withdraw money from a bank even if he doesn’t have a credit balance but the borrowing limit is fixed by commercial banks. This is an important source for business to raise its short-term finance.
As this facility is bound by a limit specified by bank i.e. the borrowing it is determined based on the drawing power of the borrower.

Advantages:

  • The flexibility of deposit and withdrawal
  • Cash credits are easily arranged at a short notice by bankers.
  • Interest tax is deductible hence reducing the overall tax burden.
  • Interest only on the amount utilized- as the lender charges interest on the amount withdrawn and not on the sanctioned amount.

Disadvantages:

  • Cash Credits cannot be used for long term purposes as it is given for a maximum period of 12 months and it has to be renewed when it gets expired.
  • More compliance and checks- As the borrower is under the obligation that he must
  • Present the quarterly/ semi-annually reports with the bank.

Alternative

  • MyWay Wealth provides Mutual Funds that are based on your financial goals, investment horizon, and risk appetite. So if your financial goals are for long term (>5 years) you can easily invest in Equity Mutual Funds.
  • To invest in Mutual Funds on MyWay Wealth all you need to do is complete the paperless KYC (Know Your Customer) process, which hardly takes 5 mins, and you are all set to start your investment journey.

So hope this article gave you a fair idea of all the traditional Bank Accounts and how Mutual Funds are a better option than them. And MyWay Wealth is India’s most trusted app for Direct Plan Mutual Funds. It gives you access to a wide range of tailor-made mutual funds that suit your financial position and all this for No Commission and No Fees.

Hurry, Start investing today on MyWay Wealth!

5 Reasons people should NOT opt out of Term Insurance

Term insurance

Do you know that there are so many different kinds of Life Insurance? You have your Unit linked insurance plan (ULIP) which gives you insurance along with an investment opportunity. There are these very famous endowment plans that promise insurance along with savings. And many more like Money back, Child’s Plan, Retirement Plans, etc. Term insurance, also known as “pure risk cover” is one such variant of Life insurance policy where the dependents get a sum assured by the insurer, redeemable on the death of the policyholder during the tenure of the policy. It is quite simple and extremely valuable. However, people tend to perceive it as a costly expense compared to other insurance plans, as there are no returns. Here are 5 reasons why people opt out of term insurance and shouldn’t do so:

#1: I don’t get my money back/ Give my money back!

Insurance is bought for all the wrong reasons like greed, taxes, fear, etc but the only real reason to buy insurance is security. Put an endowment plan under the microscope and see it serves the purpose for which you pay the premium. Can you justify it? No, because it is a product that dances around security instead of actually providing it. Term insurance is very simple in terms of providing absolute security. You pay a price to ensure your dependents of any troubles after you die. It is not a tool of investment, but a guarantee to receive a fixed amount if something happened to you. If you are hungry for returns the most ideal option is an investment in Mutual Funds. But term insurance will return a fixed lump sum in the event of your death.

# 2: It’s very expensive!

When you check on the amount a person normally pays for an insurance policy compared against the average term insurance premium will show you the truth. Term insurance is lower in terms of premium as compared to endowment plans and Unit-linked plans. To many people, it seems like a costly affair, but what you must remember is the pot of gold in the end instead of looking solely at the current costs to bear.

# 3: Other schemes have better benefits!

The term insurance simply acts as a financial safeguard for the family, it is affordable, receives tax deduction under Section 80C and the best of all is the value over cost. The premium you pay to maintain the policy adds up to peanuts compared to the real value of the policy. A popular diversion which leads to losing the essential aim of insurance is the fancy add-ons that other schemes provide. Don’t mix your investment with your insurance!

# 4: I have more important things!

People often opt out of paying their term insurance because they find it plausible to spend it on things like education, marriage, medical bills, etc. But you just have to ask yourself what happens when you die? Who will take care of it all? It doesn’t mean you shouldn’t save up for such things, but in order to avoid unloading these burdens on your loved ones, it is recommended to take term insurance.

# 5: It’s a luxury, not a need!

There is a false impression going around that term insurance is a luxury and it is not a necessity for everyone. You spend time and money every single day to increase their security in terms of health, financials, etc. So it seems fitting to protect the ones you love from any troubles when you’re not around. It is for everyone who wants to keep their dependents safe.

#EXTRA: I haven’t heard of it!

Why do you never hear of advertisements selling term insurance? Think of it this way. You are offered two different cakes. One is a colorful confetti cake with sprinkles and buttercream which is a real treat to your eyes; on the other end, you have a simple chocolate cake with a humble glaze. The confetti cakes seem to have a lot to offer but when you bite into it you find it is just a simple sponge with a whole mess of toppings and nothing special. While the chocolate cake is rich in quality.
ReturnsSource: Unsplash

However, term insurance is like the chocolate cake, it is pure to its purpose and nothing more. There are no fancy toppings to it like other schemes. While your endowment plans are like the confetti cake. The fancy things will have you pay more for nothing, while the term insurance delivers as promised.

Ignorance is never bliss in our world. It is always good to understand what you want before you lock into any insurance scheme, verify the big picture of every option you have. Use an app like MyWay Wealth which helps you set up term insurance.

MyWay app

MyWay app

MyWay app

MyWay app

Be sure before you insure!

MyWay Wealth Weekly Update (Issue #19): The worry in debt markets and your portfolio!

In recent times, debt funds have proved that they are not without risk. This entire slew of events began right after the IL&FS fiasco was brought to light.

Key events included:

  • On January 22, CRISIL has downgraded its rating on the non-convertible debentures (NCDs) of Jharkhand Road Projects or JRPICL to ‘CRISIL D’ from ‘CRISIL BB(SO)/Watch Negative’.
  • Essel Group founder Subhash Chandra gave a scare to markets after he came out with a letter post the 26% crash in Zee Entertainment shares, apologising to bankers, NBFCs and mutual funds for not “living up to expectations”.
  • The sharp fall in shares of some Zee companies added to the debt funds’ woes as they were the backing of securities in which many debt funds had invested in.
  • Care ratings have downgraded over Rs. 1 lakh crore worth of debt issued by the country’s third largest housing finance firm DHFL.

The biggest investors under pressure were mutual funds.

Are mutual funds in any position to mitigate such risk? (more…)

MyWay Wealth, your One Stop Destination for Mutual funds

Many people these days want to put their money to work through investments. But most of the time, people hesitate or withdraw from investments because they consider it has a hassle, be it in terms of the paperwork involved and which investment option to choose. Some technically savvy people would want to invest through online investment platforms i.e. through websites or mobile apps but are confused to choose the best platform.
This article helps you solve all these confusions. Yes, MyWay Wealth is India’s most trusted platform for Direct Plans Mutual Funds. It is your one-stop destination for all Mutual Funds because they don’t just provide access to a wide range of funds but also provide funds that suit your investment needs. MyWay helps you choose the right investment option that is based on your financial goal and risk appetite.

Let’s look at more features of MyWay Wealth and what it has in store for you:

 

Get tailor-made funds

With MyWay Wealth’s Direct Plans, you receive fund recommendations only after you have keyed in the amount you can contribute every month, the time period of your investment and other such information that suit your financial goals and needs.

MyWay
Equity, Debt, Hybrid Discover a wide range of fundsInvest in various categories of funds which have consistently outperformed the market. MyWay Wealth’s Smart Recommendation Engine is built on top of scientific financial models and years of historical market data.

Explore Top rated Mutual Fund across different categories

                 Keep track of your funds

MyWay Wealth has “advanced research reports” and “portfolio alerts” that help you remain in touch with your portfolio and make wise decisions.

Invest
Term Insurance Save for a specific purpose

With MyWay Wealth, you can park money for a period between 1- 3 years or you can also save money for a specific goal such as retirement fund, child’s education or wedding, vacation or any such goal.

Save specifically for your retirement

With MyWay Wealth, you can invest in the National Pension System (NPS) and save for retirement and earn more returns than that of PPF.

Read More on NPS: Why is NPS better than PPF?

NPS page
term insurance Secure your family

By investing the same amount as your monthly Netflix subscription, you can get a life cover of 50 lakhs to 2Cr, to support your family in the event of your death..

Read More on Term Insurance: Secure your family with Term Insurance.

Save Tax

With MyWay you can invest specifically in tax saving ELSS Mutual Funds and get a larger share of returns from your investments.

Explore: best tax saving funds with high returns

ELSS
SIP  

  Maintain a disciplined savings habit

With Systematic Investment Plans (SIPs) you can invest small amounts in regular installments and make your savings work better. If you prefer to invest in lump-sum then you can always choose One-time investments.

All this for No Fees and No Commission!. Choose MyWay Wealth app and it would be your one-stop destination to dive into various mutual funds schemes that suit your investment horizon and risk appetite.
Invest now

Think Investment, Think MyWay Wealth!

Investment fads come and go, but choices remain the same.

Investment fads

The age-old fundamentals taught to us at schools never change, right? A Gurukula has now become a Convent, or a blackboard could have changed to a smart-board but the values imbibed in us remain the same.

Same works for Investment Choices.

The performance of the Indian Economy can be determined with the help of the GDP (Gross Domestic Product). GDP in simple words is the market value of all the final goods and services produced in a period of time. India’s GDP growth rate was 8.3 percent in the year 2003, raised to 10.4 percent in 2010 but fell to 3.2 percent in the year 2013 and again saw a rise in the year 2017 with 6.7 percent as the growth rate.

So an Economy depends on various economic factors and numbers do fluctuate, so it’s quite natural for other indicators like Inflation, Interest Rates, Corporate Profits, Currency Strength and also Stock Market to go through a roller coaster ride. The Indian Economy is facing a shock wave and we definitely foresee a doubtful future with the three C’s of Confusion, Consternation, and Concern.

The Stock Market is known for its volatility in stock prices. But trying to track the Stock Market on a daily basis to gauge the performance of your long term equity funds, is like trying to find a needle in a haystack. Yet, there are people who do this as a job, they are called Traders or Speculators and it is their role to inspect the market minute to minute. 

But we are investors. Most of us are salaried people and do afford to set aside savings every month. But the normal mistake seen in investors is that we get into a “herd mentality”. We buy more when the market goes up and sell when the markets go down. It’s likely we follow the herd and do what other investors do. But in reality, the ones who make money are the ones who stay invested.

So rather than getting baffled by the volatility of the markets, what we can do is invest a small chunk of our savings every month in equity through a well-structured plan called SIPs (Systematic Investment Plan). If you invest with the objective is to make high returns from your valuable investments, then the best way is to stay put for a long time. By doing so, you will not only earn index-beating returns but also meet the rising prices in the economy. So all you need is the fourth C: Consistency.

illustration

Behavioural Finance plays a key role in understanding the investment activities of people. Another aspect where the “herd mentality” can be seen again is with Gold and Real Estate. 8 out of 10 people in a family gathering or a common forum will brag about their success stories of earning high returns by investing in real estate or gold. But what they don’t include is the making charges that go into Gold returns and transaction costs, taxes, cost of maintenance, registration or stamp duty, when it comes to Real Estate. And not to forget about the hassle involved in finding or selling property in India, including the cost of fixing the house for the tenants. Also, we don’t keep a close watch on the property prices or gold prices as much as we look at the day-to-day variations in the stock market. If we did, we would realize that Gold and Real Estate also go through volatility. When it comes to risk, Real Estate does go through price, liquidity and legal risk and Gold is equally risky as it is not a source of regular income. But thanks to the stock market, although it is risky, at the same time it is also transparent, helping us to track them and also help in creating and generating wealth/income.  

If you’re a person who reads and consumes a lot of knowledge on Mutual Funds, you would have noticed that a number of books, magazines or articles still follow“Logical Investment Techniques”. Where investors like you and me gasp at day-to-day conditions in the stock market and ponder on our decisions regarding  funds, famous authors like Monika Halan (Editor, MintMoney and author of “Let’s Talk Money”) and Dhirendra Kumar (Founder and Chief Executive, Value Research and author of “Best Investments”), believe that equity fights inflation, provided you stick to the knit.

To get access to top recommended Equity Mutual Funds, MyWay Wealth is a one-stop destination. From Equity to mid-cap funds, tax saving to advanced investing, you can find them all on MyWay. And for investors who feel Gold is a good investment option, you still invest in them through Gold funds with MyWay rather than physical Gold. All you need is a few minutes to complete your KYC process and input your monthly contribution.

MyWay Wealth

As stated before, numbers in an Economy aren’t stable always, volatility in the market shall prevail, but what remains unchanged is that fact that your investment decision will rely on your risk appetite and your financial needs. This will not alter even if you would choose a bank for an investment or an app for the same. For example: If Equity funds through Systematic Investments Plans (SIPs), was your choice to meet your short term goals 5 years back, then, you can still choose the same investment for your present goals. All that would change is the amount you would deposit through SIPs (it’s wise to increment the amount you contribute to SIPs as and when you’re earning potential increases) which will be according to your present goals, needs, and profile.

Remember not to get disenchanted with the daily fads of the Stock Market.

Is it safe to invest in Mutual Funds?

Safe to invest

I am always amazed at how ants work as a team. Ants always carry huge objects together making it possible for them to achieve their goals and reduces the burden of a single ant.

Mutual Funds use the same ideology of ants. The pool in funds from multiple investors and use this money to purchase various securities in the market such as stock, bonds, etc.

If this was so simple, then why do people fear to invest in Mutual funds and resort to traditional instruments such as Fixed Deposits, Recurring Deposit or leave money idle in Savings Account?

The answer is, Safety!

Let me answer the most common question in the mind of investors:

Is it safe to invest in Mutual Funds?

Investments in Mutual funds are highly safe due to the following reasons:

  1. Diversification

Remember the old saying “Don’t put all your eggs in the same basket”, Mutual funds have definitely capitalized on this quote. Mutual funds wisely invest your funds in various instruments such as stocks, bonds, and other commodities. Thus diversifying the risk that could arise from investing in a single stock.

Read More: Top Rated Mutual Funds Categories

  1.  Reduces Risk

“Mutual fund investments are subject to market risks. Please read the scheme information and other related documents before investing. “ How can it reduce risk?

But imagine if you have to go to the stock market and buy and sell stocks yourself and track companies. Are you free from risks? No, because we are investors not traders. With Mutual funds, your funds are managed by Professional Fund Managers who are expert in financial markets. They make sure your investments are put into well-performing assets and closely choose schemes that suit your investment and risk horizon. They perform regular rebalancing of your portfolio and structure your investment allocation to take complete advantage of market conditions. This also means that in contrast to Fixed Deposits, your potential to earn more returns is higher.

Read More: What is Portfolio Rebalancing?

  1.  Inflation-beating returns.

This is one more reason why I say investing in mutual funds are safe. When you invest your money in Fixed Deposits, your money is locked for a fixed period of time and for a predetermined interest rate. What if during this period the inflation rate is more than the return rates provided by Fixed Deposits? How will you face the rising prices? Mutual funds have a solution for this. The average inflation rate in India is 4% and if you take the past 10 years returns of Mutual funds it ranges between 12% – 16% which easily beats inflation. Thanks to the dynamic stock market.

Read More: Mutual Funds that have provided returns > 15%

  1.      Flexibility

Emergencies such as accidents or health issues are uninvited guests in anyone’s life. One way to face them is to be able to access your money easily. With Mutual Funds, you can sell your funds in a short period by investing in Short Duration Funds. Also, mutual funds allow you to invest and park your money aside for a shorter duration between 1-3 years. This helps you to save money for a goal.

Read More: Short Duration Funds

  1.     A fund for every investor.

Every person is unique, so are your goals and needs. With mutual funds, every investor has a scheme that is drafted specially for him/her. If you are a conservative user then Mutual funds allow you to invest primarily in bonds (Government securities – risk-free) with little exposure to stock (Equities). Say if you are a customer who wants moderate returns and are willing to face more risk, then with mutual funds you can invest 60% in Debt and 40% in Equity. These percentages can vary as per your wish.

Another benefit with mutual funds is that the minimum investment amount is as small as Rs. 500 /-.

Read More: Goal Based Investing

  1.     Tax Benefits

Mutual Funds have a number of tax benefits such as:

  • Schemes such as ELSS (Equity Linked Savings Scheme) provide tax exemptions up to 1.5 lakhs under Section 80(C).
  • National Pension Scheme is a plan that helps investors to save for retirement. With NPS save tax up to 1.5 lakhs every year under Section 80(CCD) and save additionally Rs. 50,000 p.a. under Section 80CCD(1B).
  • Term Insurance, a plan that lets you cover your family in the event of your untimely death and helps you save tax up to Rs. 46,800.
  1.      Safety

Another famous instrument for investing in Gold, Silver or Platinum. But with buying these commodities also comes the fear of losing it to theft or damage of purity. In the case of gold, there is an extra worry about making and wastage charges. But with Mutual funds, you can invest in Gold Funds. These are virtual funds wherein the investor can gain appreciation in Gold value without the hassle of owning physical Gold. Read More: Top Rated Gold Funds

“Everything you want is on the other side of fear”

–Jack Canfield

Stop fearing risk, rather remember to stay invested for a long term and leverage the benefits of Mutual Funds. Begin your investments today with “MyWay Wealth” app.

Think Wise, Think MyWay