InvestorQ : Why people have started investing in Mutual funds in India?
krithika Saxena made post

Why people have started investing in Mutual funds in India?

Answer
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Shivali Sharma answered.
8 months ago


Investment in mutual funds is less risky as compared to direct investment in the stock market. In India, earlier people were less aware of their saving options and hence mostly preferred investing in fixed deposits even if it was less attractive. Some traditional methods of investment involve Real Estate, Investment in gold jewellery, giving money on loan and receiving interest on them and bank fixed deposits, post office deposits, etc. However, the new generation needs something that is attractive, fulfills their long-term objectives and allows them some sense of security. Amidst this and considering the demands of new investors mutual fund investment came into light. While the investors struggle to decide something that could give them all the benefits, mutual fund investment came handy.

Mutual fund investment helps investors to make a stock market investment but in a less risky manner, and it also helps in providing better returns. Investors are free to choose the tenure of their investment, which is a minimum of 90 days to any period. Under mutual fund investment, investors also receive the benefit of compounding, i.e. interest on interest can also be earned, which option is not available in Fixed Deposits.


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K V RAO answered.
8 months ago


When you don't want to invest directly in stock market, you route your surplus savings through mutual funds. Relatively, it's safer through mfs. But it should on a longer time horizon. Further it's better to adopt SIP for mf investments.