Personal Finance

5 Reasons Why You Should Invest in Mutual Funds

October 31, 2019

5 Reasons Why You Should Invest in Mutual Funds

Most of us find ourselves trapped in the cycle of earning, saving and spending every month. While saving is a good practice, it ideally does not secure your future. Saving helps you accumulate some cash but the money still sits idle in your account. Investing, on the other hand, multiplies your money. While there are a number of ways you can invest, here is some food for thought on why you should invest in mutual funds and how Paytm Money simplifies it for you.

Mutual fund

1. Funds Managed by Experts

Mutual funds are managed by fund managers who are responsible for making big decisions on your behalf. They identify the right securities and buy them at the right time. In India, it is the Securities and Exchange Board of India (SEBI) that regulates all the mutual funds. This means that there is the highest level of transparency and security in practice. With Paytm Money as your trusted wealth partner, you can rest assured that your hard-earned money is in safe hands.

2. Higher Returns on Investment

Mutual funds give you the opportunity to invest in a wide range of investment instruments. These instruments have been known to earn higher returns as compared to some other traditional forms of investments. It is true that higher returns are generally accompanied by higher risks, but even low-risk investment options like debt funds give you better returns than a bank FD.

3. Flexibility in your Investments

Mutual funds, unlike some other investments, allow you to withdraw your investments in case of an emergency. In terms of restrictions on withdrawing your money, there is little to no lock-in periods. Even Tax Saving mutual funds have the shortest mandatory investment period of only 3 years, unlike tax-saving FDs of 5 years. Though you have this flexibility to withdraw your investment in times of need, experts suggest against it. It is recommended that you stay invested for the duration you had intended in order to meet your goals. The longer you stay invested, the better are your chances for a higher return.

4. Power of Diversification

Diversification simply means spreading your investment across a range of asset classes to minimize the risk of exposure. Mutual funds allow you the advantage of diversification as your fund manager invests across a variety of securities. This way, if one stock doesn’t perform well, it is balanced out by the performance of the remaining stocks in your fund. It is also advised to not invest all your money in just one mutual fund but across different types of mutual funds to further lessen the risk.

5. Convenient Online Investing

Investing in mutual funds has become convenient and hassle-free with the entire process of investing now being done online. At a click, you can now create an account, get verified in less than 30 minutes and start investing. The strict KYC norms placed by the SEBI ensure that your details are accurate and your transactions secure. It is no more a time consuming and tedious process but quick, transparent and convenient with Paytm Money.
If you are still not sold on the idea of mutual funds, here’s another reason why you should rethink your decision. Paytm brings you the Paytm Money App to make investing simple. With the simplicity of the app, no hidden charges, and the best of funds to pick from, your investing journey couldn’t get a better start.

Download the app to know more.