5 ways to choose the right Mutual Fund – In today’s time, many people invest in Mutual Fund to earn more money and expect high returns. There are many Mutual Funds available in the market nowadays, by investing you can get good returns. But before getting good returns, you need to know whether the Mutual Fund in which you are going to invest is right for you or not. That is why in this article we are going to tell you 5 ways to choose the right Mutual Fund.
In today’s time, many people are going through a bad financial situation, so they want to invest the money they have saved in some place from where they can get good benefits. Whenever it comes to small investment, the name of Mutual Fund comes first. Nowadays there are many Mutual Funds in which you can get high returns by investing.
5 Ways to Choose The Right Mutual Fund
If you are going to invest in Mutual Fund, then before that you should know how you can choose the right Mutual Fund, so we are going to tell you 5 ways to choose the right Mutual Fund below.
See your goal before investing
Before choosing any Mutual Fund, it is important to see for which goal you are investing in Mutual Fund. For example, if you are investing for the down payment of a home loan or a car loan, then you can invest in Equity Mutual Funds. If you want to invest for a shorter day, then you can choose Liquid Funds or Ultra-short Term
Funds for this.
Apart from this, if you want to invest for 1 to 3 years, then you can choose Short Term Debt Funds. Overall, before investing, you have to see what you want to invest for in the future. If the goal for which you are investing is going to come after a few days, then you choose the fund accordingly. If you choose the fund thoughtfully, then you can earn a lot of money in it.
When choosing any Mutual Fund, keep in mind how much your risk appetite is. If you are willing to take risk in Mutual Fund, then you can choose a Long Term Fund or Short Term Fund accordingly. For example, if you invest in liquid funds, then there is less risk. For your information, let us know that if you want to take less risk then it gives less return but if you want to take more risk then you get more return. Sometimes this equation can be the opposite.
Previous Performance and Rating of Mutual Fund
Before investing in any Mutual Fund, you must see its past performance. If a Mutual Fund has been performing well for some time, it can give you good returns in the future. However, it is possible that in the future it may also harm you. Apart from this, it is very important to see the rating of any Mutual Fund, for this, companies like CRISIL and ICRA give Mutual Fund rating. You can get a lot of work right now.
Select Low Cost Fund House
Many times the fund house is charged by the investors to manage any Mutual Fund Scheme. Normally, the fund house has to pay some percentage of the return that you get. That is why before choosing any fund, you should see that a lower percentage is being charged on the returns of which Mutual Fund.
If you get a return on the Mutual Fund that you have purchased, some percentage tax is levied on it. It depends on the category of Tax Rate Mutual Fund and the duration of the investment. For your information, let us know that investment of more than 1 year in an Equity Mutual Fund is considered as Long Term Investment. Equity Mutual Fund carries 15% tax implementation on Short Term Capital Gains (STCG).
Apart from this, a discount of 1 lakh rupees is given in a financial year for Long Term Capital Gains (LTCG) and 10% tax is levied on it if you have received more than 1 lakh rupees. Apart from this, Tax Rate is levied for Debt Funds and for STCG as per Tax Slab of Investors and 20% is levied on LTCG with indexation benefit.