FAQs On Mutual Funds
How to choose a suitable mutual fund?
A right fund plan cannot be chosen only by considering the past performance of the fund and fund manager. To choose the right mutual fund, you need to check if the fund’s investment objective is in line with your goals.
How can you redeem your mutual fund units?
You can redeem MF units anytime. You need to inform your fund house or the agent. Your money will be deposited to your bank account within 3- 7 working days, post-redemption.
What is the time period considered for the purpose of income tax?
Income Tax is levied on the annual income of taxpayers. It is levied based on the income you earn in each financial year (1 April of this year till 31 March of the next year) and not the calendar year. The previous year is a period for which a person has to pay tax. Assessment year is a 12 month period following the previous year, during which a taxpayer files his/her ITR.
What is CRISIL MF ranking?
CRISIL is an analytical company, which provides rankings, research, and advisory services. MF rankings given by CRISIL depend on global parameters. The rankings are very crucial for investors when they are deciding on a particular scheme.
Is SIP better than a lump sum?
It depends on the individuals and the market scenario. If you are risk-averse, then investing in via SIP is advisable. If the markets have fallen record levels, then a lump sum is advisable. Again, you need to assess your risk profile and requirements.
Do mutual funds invest only in stocks?
No, mutual funds don’t invest only in stocks. Only equity funds invest in stocks, while debt funds and liquid funds hardly invest in stocks. In fact, there are some debt funds that don’t invest in stocks at all.
What is an exit load?
It is the penalty charged by the fund house if you are not able to stay invested over a particular time frame. Most mutual funds are open-ended and come with no exit load. Investors should read the fund offer carefully before investing.
What is an expense ratio
The expense ratio is the fee charged by the fund houses to manage the investments of the investors. It is always less than 2.5% of the amount invested by the investors.
Are mutual funds safe?
Yes, mutual fund investments are absolutely safe as all fund plans and fund houses are under the hawk eye of the Securities and Exchange Board of India (SEBI), the Association of Mutual Funds in India (AMFI) and the Reserve Bank of India (RBI).
Who can invest in mutual funds?
All individuals who have completed their KYC process are eligible to invest in mutual funds. However, some fund houses don’t accept investments from NRIs living in the United States and Canada due to the FACTA regulations.