Why Mutual Funds are Great First Investment

We live in a world where money plays a very important role in our lives. Financial planning is a priority as you start to manage money on your own. Whether you just turned eighteen or are a salaried professional, you must learn to save as well as invest your money.  It is a fact that the money you hold today will decrease in value in the coming years due to inflation. One of the best measures to counter inflation is to start investing. Many people spend less, save more and end up saving a decent amount. Only saving money and keeping all of it in your bank account might not be a great idea. Why not start making money with money? In simple words, again, start investing. Proper investments will give you the returns you desire. There are many options available today – stocks, mutual funds, crypto, etc. To make the process simpler, you can start investing using any “best investment” or “best mutual fund app” on the market. Still, the question remains, where should you invest if you are investing for the first time?

There is no correct answer to this question but still, we would recommend – Mutual Funds. Mutual funds are pools of money collected from various investors which then are invested by a fund manager to obtain returns. The returns then are distributed among the investors. Examples of mutual funds in India – UTI Asset Management, ICICI Mutual Fund, Axis Small Cap Fund, and many more. 

Here are some reasons why mutual funds can be your first choice of investment:

Start investing with a small amount:

When you first start investing you obviously won’t be investing thousands of rupees in the first go.You can invest in a mutual fund starting with as little as ₹500 for a one-time payment and if you opt for SIPs the minimum amount starts from just ₹100. Now with such small amounts required, anyone can invest in mutual funds. 

One Time Investment & SIP options

Another advantage of a mutual fund is that you can either choose to pay one time and invest or you can choose SIP. The term SIP stands for Systematic Investment Plans. You can use this option to invest at regular intervals. So instead of investing ₹10K at once, you can invest ₹1000 each month for 10 months. SIP can be an effective way to build up financial discipline.

Hassle-free process & Automated Payments

Apps like Scripbox, ICICI Prudential Mutual Fund app, etc. offer services for smooth investing processes. Registering and completing your KYC is very easy in these apps. Apart from that, you can set up an automated payment option so that you don’t miss the payment of SIP.  That feature will deduct money from your account and invest on your behalf. 

This is just the first step, you can further diversify your portfolio by investing in other investment options.

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