Mutual fund investments have emerged as an excellent alternative to bank fixed deposits and sovereign savings schemes in recent times. AMFI data reveals that the Indian mutual fund industry has expanded by over 500% between 2012 and 2022, from INR 6.75 trillion to INR 37.56 trillion, to be precise.

While ever-falling bank interest rates are a reason, multiple investment options across asset classes are the other reason for the Indian mutual fund industry's stellar growth. This article lists the top benefits of investing in mutual funds and the ways to invest.  

 

Why Should You Invest in Mutual Funds in 2022?

Here are the top reasons why you must consider mutual fund investments in 2022:

  • Decent Capital Growth - A quick scan of the best mutual fund schemes proves that they have perpetually delivered higher returns than conventional investment instruments.  
  • Suit Your Risk Appetite - You can invest in four broad types of mutual funds in India - equity, debt, commodities, and index. While equity and commodities suit risk-takers, debt and index funds make risk-averse investors happy. 
  • Calculate the Returns - Many mutual fund houses provide free calculators for efficient mutual fund returns calculation. You can check the returns since a fund's inception and enter them into the calculator to guess the probable returns.  
  • Professional Research - If you have never invested in stocks or debt instruments before, chances are that you will lose money by trading directly. Mutual funds provide a better way to enter the capital market. Since expert fund managers manage mutual funds, they understand the ups and downs and place apt trades to help you get decent returns. 

How Can You Invest in Mutual Funds?

The best feature of mutual fund investments is that you do not need any special account. Fund houses debit the investment amount directly and send the redemption proceeds to your bank account. Here are the steps for investing in mutual funds in India:

Offline Mode

Mutual fund houses offer their investment schemes through impanelled distributors in India. If you want to invest offline, you must approach your nearest mutual fund distributor and ask for an account opening form. You must attach your PAN card and address proof (preferably Aadhar card) with the application and submit it along with a cheque mentioning the investment amount.

After getting your application form, the distributor sends it to the concerned mutual fund house. The mutual fund house evaluates your documents, issues units, and sends you an account statement through email and post. You can either register online to redeem, switch, or reinvest independently or approach a distributor to do the same.

It is wise to know that mutual fund distributors offer investments in ''Regular'' mutual funds. The returns from a ''Regular'' fund might be 1% to 1.5% lower than ''Direct'' funds.

Online Mode

Mutual fund houses allow investment in ''Direct'' mutual funds through their websites. Once you select the mutual fund house, you can visit their website and check the available mutual fund schemes. You can either invest in active open-ended schemes or a New Fund Offer (NFO). An NFO allows you to enter during the launch of a fund.

After figuring out the mutual fund scheme you wish to invest in, you can click on the ''Invest Now'' tab. The fund house will ask you to upload your PAN card, address proof, and deposit the investment amount through net banking, credit/debit cards, or UPI. If you invest before 3 pm on a business day, the mutual fund house will process your application within the same day. You may expect the account statement within two business days.

PGIM Simplifies Mutual Fund Investments 

PGIM India lets you invest seamlessly and offers access to a feature-rich profile. You can log into your account and visit the dashboard to get a ready reckoner of your holdings and invest, redeem, and switch with a click. Experience convenient investing in top-performing mutual funds.