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Frequent Concerns in Mutual Funds Investing

What is a mutual fund?

A mutual fund pools money from multiple investors and invests in equities, debt, or a mix of both, managed by professional fund managers.

Are mutual funds safe?

All mutual funds carry some level of market risk, but the risk varies by type- equity funds have higher risk, debt funds lower, and hybrid funds moderate.

How much money do I need to start in SIP?

You can start investing with as low as ₹500 through SIPs, depending on the AMC. While every AMC has its own minimum value, some AMCs allow SIPs of ₹100 also.

What is NAV in mutual funds?

NAV (Net Asset Value) is the per-unit price of a mutual fund. It reflects the market value of the fund’s assets minus liabilities. It changes daily and updated every night depending on market.

Can I withdraw anytime?

Yes, you can withdraw anytime except in ELSS- Tax Saving Funds (3-year lock-in). Other funds may have exit loads if redeemed before a specified period (usually one year).

What is an exit load?

A small fee charged when you exit a fund before the minimum holding period defined by the AMC (usually 1% if redeemed before 1 year, always refer to Scheme Information Document)

How are mutual funds taxed in India?

Equity funds: LTCG after 1 year (12.5%, after exemption of ₹1.25 Lakh); STCG before 1 year (20 % without any exemption), Debt funds: as per income slab, ELSS: Section 80C (Equity Taxation )

What documents are required to invest?

All you need is PAN, Aadhar, Bank Details, Personal Contact Details, to perform a one-time "validated" kyc (if not done earlier). Kyc is a one time process for all market products.

What is a "Validated" kyc?

It is a SEBI-recognised KYC status where the investor’s identity is fully verified through Aadhaar authentication, allowing unrestricted investments across all platforms.

Can NRIs invest in Indian mutual funds?

Yes, but some restrictions might apply based on FATCA and AMC guidelines. All you need is a NRE/NRO bank account, ready kyc, foreign address proof, and all set to go.

Can I change from one fund to another?

Yes, you can swicth your schemes from one to another, equity to debt or anywhere. For now, it is allowed within same AMC only. You cannot choose another AMC to switch as of now.

What is SIP?

SIP is a method of investing a fixed amount into a mutual fund on a chosen monthly date, automatically debited through NACH for disciplined and consistent investing.

What if I don’t have balance on my SIP date?

If you don’t have enough balance, the SIP won’t be debited or invested. Your bank may charge a bounce fee, and three consecutive misses can auto-cancel your SIP.

What is STP?

STP (Systematic Transfer Plan) lets you automatically transfer a fixed amount from one mutual fund scheme to another at regular intervals, helping you shift investments gradually.

What is SWP?

SWP (Systematic Withdrawal Plan) allows you to withdraw a fixed amount from your investments at regular intervals, giving you the cash flow while the remaining amount stays invested.

Can I change or increase my SIP amount later?

Yes, you can modify your SIP anytime. You can also choose a Step-Up SIP, where the amount increases automatically at set intervals you choose at the time of SIP registration.

Can I partially withdraw or invest anytime?

Yes, you can partially withdraw or invest in mutual funds. Only ELSS has a 3-year lock-in; all other funds allow free partial withdrawals and fresh investments whenever you want.

Do I need to pay any charges to invest?

You don't need to pay anything except internal expense ratio which is diclosed in fund scheme documents. Infact, it is illegal to take charges from investors for selling mutual funds.

What is expense ratio?

It is the fee a mutual fund charges to manage your money. It covers fund management, administration, and operational costs, and is deducted directly from the fund’s returns.

What happens to my investment after me?

Your nominee can easily claim, transmit, and redeem your mutual fund investment after basic verification. You can add upto 10 nominees in your investment with percentage sharing.

What if don't register nominees?

If you don’t register nominees, your investment will go to your legal heirs, but the claim process becomes longer and requires additional documents and legal proofs, succession (high value).

What if my SIP date falls on a holiday?

The amount will be debited on the next working day, and the NAV will be applied based on the day your payment is successfully received and acknowledged by the mutual fund.

We’ll be more than happy to educate you and answer all your queries—absolutely free.