The money market has many options where the investor can get better returns compared to the fund kept in a saving account or even a fixed deposit. However, here one needs to note that the market also has a risk in some of the options, and there is no guarantee that he will get the desired returns, but one can check the past performance of the fund and try to compare it with various funds as well as schemes which can help him invest in an option where maximum return can be availed. One can find several mutual fund companies in the market with various schemes and plans. These schemes are designed by the experts of the field and created with a vision to have better return to the investors.
What happens to the invested amount?
For better returns, the mutual fund companies invest the collected amount from various investors in the equity market. For this task, they have dedicated fund managers who watch the market continuously and switch the investment as and when needed. The equity mutual funds have a considerable risk doubtlessly as they are associated with share market directly, but the experts do not allow the fund to be invested in a few companies only. They diversify the investment and hence control the risk of loss. The profit whatever is earned through such investments is distributed among the unit holders pro-rata, which can help the investors earn a good return. For the desired return, one needs to check a few of the companies before investing the fund and go for only those who are known for their return offered in the market.
One can check the record of the company on various sites on the internet and also the official site of the company. This can help one know what will happen to his investment if the amount is invested in this option.
To invest the amount in a mutual fund, one needs to fill an application form and provide some documents. One also needs to pay the desired amount of investment to the company. This process can be done offline, as well as online. In an offline way, one needs to fill the form manually, attach necessary documents and provide a cheque for the concerned amount that he wants to invest.
In online option, one can go to the site and fill the form online, upload the documents and also pay the amount online by bank transfer. After the acceptance of the application, the investor gets a statement where he can find all of his investment details.
When the market is bullish, one can find a good return on his investment in this option. If one goes for SIP, he can take advantage of bullish as well as bearish trends. The power of compounding and reinvestment of profit can help one grow the investment faster and achieve the financial goals in a limited period also. The risk to the invested amount is also limited if one goes for the SIP while investing in mutual funds.