Mutual Funds in India are categorised by asset class, risk, and structure. Here's a breakdown:
| Type | Description | Risk Level | Ideal For |
|---|---|---|---|
| Equity Funds | Invest 65%+ in stocks. Sub-types: Large-Cap (stable giants like Reliance), Mid/Small-Cap (growth-oriented), Multi-Cap (diversified). | High | Long-term growth-oriented investors (7+ years) |
| Debt Funds | Focus on bonds, G-Secs, and corporate debt. Sub-types: Liquid (short-term), Corporate Bond (medium), Gilt (govt. securities). | Low-Medium | Short-term money-parking investors looking for stability. |
| Hybrid Funds | Mix equity (35–65%) and debt. Sub-types: Aggressive (equity-heavy), Conservative (debt-heavy), Balanced Advantage (dynamic allocation). | Medium | Moderate risk-takers |
| Solution-Oriented Funds | Goal-specific, like Children's (locked 5 years) or Retirement (long lock-in). | Medium-High | Milestone-planning investors. |
| Index / ETFs | Track indices like Nifty 50. Low-cost, passive. | Varies with index | Cost-conscious investors |
| ELSS (Tax-Saving) | Equity funds with a 3-year lock-in are eligible for 80C deductions. | High | Tax optimisation + growth-oriented investors. |
| Fund of Funds (FoFs) | Invest in other mutual funds, often international. | Medium | Global diversification |
Equity funds may suit long-term growth goals.
Debt funds may suit stability and liquidity needs.
Hybrid funds may suit investors looking for balanced exposure.
ELSS funds may help combine tax-saving with investing discipline.
Investors spread their investments across different funds, so underperformance in one, two, or a few funds does not affect the overall portfolio.
Skilled fund managers oversee the markets and make informed decisions, highly suitable for those lacking time and/or skills.
They offer easy redemption within 1 to 3 days, compared with fixed deposits and other stock investments.
Mutual fund investments can be started with small amounts through SIPs, which facilitate disciplined investing.
Daily NAV (Net Asset Value) announcements and disclosures are crucial in fostering trust.
Invest through SIP (Systematic Investment Plan), STP (Systematic Transfer Plan), and SWP (Systematic Withdrawal Plan); Easy switching between funds, Top-up SIPs, and more.
Equity-oriented mutual funds held for more than one year qualify for long-term capital gains (LTCG) taxation, where gains above ₹1.25 lakh in a financial year are taxed at 12.5%. Additionally, investments in ELSS funds may qualify for deductions under Section 80C (up to the applicable limit under the old tax regime).
Invest fixed amounts on a monthly basis, for instance, ₹1000 and more, utilising rupee cost averaging to buy more units when the market valuations go down.
This approach involves committing a one-time capital amount, which may offer superior growth opportunities during periods of upward market momentum.
Systematically move a fixed amount from one fund (e.g., debt) to another (e.g., equity) at set intervals. This strategy mitigates market timing risk and facilitates rupee-cost averaging on a lump sum.
Receive a fixed amount or percentage from your total investment corpus periodically (monthly/quarterly). An ideal way to generate regular post-retirement income while allowing the rest of your corpus to continue growing.
Complete your KYC verification using PAN and Aadhaar to enable seamless mutual fund investing.
A valid bank account is required for SIP registrations, lump sum investments, and redemption payouts.
Trail commission is paid periodically by asset management companies (AMCs) to distributors for servicing and retaining investors. Below is the reference range of minimum and maximum trail commissions across various scheme categories:
| Scheme Category | Minimum Trail (%) | Maximum Trail (%) |
|---|---|---|
| Liquid / Overnight Funds | 0.03% | 0.20% |
| Ultra Short / Low Duration Funds | 0.05% | 0.40% |
| Short Duration / Corporate Bond Funds | 0.10% | 0.75% |
| Hybrid Funds | 0.30% | 1.00% |
| Index Funds | 0.05% | 0.30% |
| Equity Mutual Funds | 0.50% | 1.00% |
| ELSS Funds | 0.50% | 1.20% |
| International / Thematic Funds | 0.60% | 1.10% |
| Gold Fund of Fund | 0.10% | 0.40% |
| Silver Fund of Fund | 0.10% | 0.40% |
| S. No | Mutual Fund Non-Financial Transactions | Duration | |
|---|---|---|---|
| Online | Physical | ||
| 1 | New KYC Registration / KYC Modification (KYC Updation)/ validation | 3 Working Days | 3 Working Days |
| 2 | Contact Details Update (Email & Mobile Number Update) | - | 7 Working Days |
| 3 | Name Correction / Name Change ( KYC and Folio ) | - | 7 Working Days |
| 4 | Change of Address ( KYC and Folio ) | - | 7 Working Days |
| 5 | Signature Change / Signature Updation | - | 7 Working Days |
| 6 | Change of Bank Mandate / Change of Bank Details | - | 7 Working Days |
| 7 | Change of Tax Status (e.g., Resident to NRI / NRI to Resident) | - | 7 Working Days |
| 8 | Change of Status from Minor to Major (Change of Status) | - | 7 Working Days |
| 9 | Transmission of Units (In case of holder's demise) | - | 7 Working Days |
| 10 | Transfer of Units (Off-Market Transfer / Gifting of Units) | 2 Working Day | - |
| 11 | SIP Registration | - | 7 Working Days |
| 12 | SIP Pause | - | 7 Working Days |
| 13 | SIP Cancellation | - | 7 Working Days |
| 14 | Systematic Withdrawal Plan | - | 7 Working Days |
| 15 | Systematic Transfer Plan (STP) | - | 7 Working Days |
| 16 | Switch / Switch Out - Switch In | - | 7 Working Days |
| 1) Equity | - | 2 Working Days | |
| 2) Debt | - | 1 Working Day | |
| 17 | Nominee Updation: Change / Addition / Opt-out of Nomination | - | 7 Working Days |
| 18 | PAN-Aadhaar Linking Status / Linking | 3 Working Days | - |
| 19 | Redemption | - | - |
| 1) Equity | - | 3 Working Days | |
| 2) Debt | - | 1 Working Day | |
| 20 | Additional Purchase | - | 1 Working Day |
| 21 | Client Statements | - | 1 Working Day |
| 22 | Change of Broker | - | 11 Working Days |
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