It is easier to take loans and pay them back, but investment takes much thought before trusting any mutual fund. It is difficult to choose a mutual fund that meets your requirements among those different types of mutual funds existing in India. The money that you earn cannot be given to a mutual fund without doing prior homework. Knowing about the following types will help you to get higher interests from depositing.
- Funds of money market
They are short-term deposits with lesser return value. However, they are safer than other types.
- For fixed income
Investing in this type of mutual funds gives the money back at fixed rates of interest. The money deposited is on a regular basis.
- Equity Funds
The funds are deposited in stocks; this makes them risky to invest. Equity funds are further divided into many types to provide a wider arena for customers to choose from.
- Balanced Funds
This is a blend of equities and fixed funds. The risk of losing money is lower while the return is higher. The idea of splitting money into different types of funds makes it more beneficial for the customers.
- Index Funds
The mutual fund fluctuates concerning a particular index value. The fund values are generally lower as there is not much research needed.
- Specialty Funds
These funds are based on specialities such as real estate or the commodities which are related to a good social cause.
- Fund of funds
As the name of these funds suggests, they are investments in other funds. They tend to have higher interest rates.
Investment of money earned with hard work is a difficult task. To find a reliable source and then a perfect fund is also significant. Hence, the types and the diversification of the funds must be known to an investor for better outcomes.