Since the bank rates have been falling down considerably over the past few years an increasing number of people are looking for a safe place to put their money in and let it grow. It would be a wide decision for you to invest your money in a firm like mutual fund if you want to see the value of your hard-earned money growing over a certain period of time. But investors like you need to understand how and where they should invest their money.

Investors need to be cautious, patient and knowledgeable to make a flawless decision about choosing the right kind of investment. Many experienced investors prefer stock market investments not only to as the best way of saving money but also for higher returns. But budding investors are generally not aware of the volatile market situations and they might end up with heavy losses.

For these inexperienced investors mutual funds are the best ways to save and grow money over a period of time. If you resort to any mutual fund you don’t have to bother about market condition or keeping a record of your finance as the portfolio manager of the mutual fund company you have opted for would take care of all on behalf of you.

Benefits of Mutual Funds

When it comes to India mutual funds there are many options to choose from. There is a plethora of reputed firms that claim to offer cost-effective and efficient schemes and investors need to select the one that suits their investment goals best. The reason why investors choose a mutual fund is these funds are the best ways to get the desired rate while buying or selling stocks. Another beneficial aspect of these mutual fund companies is they provide diversification of investments.

Classifications of Mutual Funds in India

Open ended – In these mutual fund companies’ money is collected from the shareholder and later invested in a pool of assets.

Close ended – These mutual funds make an initial public offering to fix the number of shared being issued.

Balanced – These mutual funds work with the combination of common stocks, preferred stocks and combination of short-term bonds.

Equity funds – Equity funds are also known as stock mutual funds. These funds invest the pooled amount of money from the public companies.

Growth – The main aim of this type of mutual fund is to appreciate the capital by investing in growth stocks.

Large cap – In these mutual funds money is invested in high-scale companies.

Mid cap – In these mutual fund companies’ money is invested in medium to small companies.

No Load – No load mutual funds claim to charge the lowest amount of money from the investors for purchase and management of the stock, bonds.

Apart from the above-mentioned classifications, mutual funds can further be classified and those types are;

• International
• Index
• Sector
• Region
• Money Market funds
• Regional market funds