How can you earn huge profits by investing in mutual funds, what is the complete process of investing?

Now people’s thinking is changing regarding savings and investment. Earlier, employees receiving salary every month kept their money in bank accounts or if they had excess money, they used to get it deposited in FD. But, it is not so now. Now people have started investing their money. Especially in share market or mutual funds.

However, investing in the stock market can be risky. Therefore, most people consider it right to invest in mutual funds. Let us tell you today in this news how to invest in mutual funds and how to earn huge profits from it.

What is the process of investing in mutual funds?

If you are going to invest in mutual funds for the first time, then you can understand from here what we have to do first for this. To invest in mutual funds, you first have to create your account with an Asset Management Company (AMC) or online platform. There are many online platforms like Groww, Zerodha, Paytm Money, ET Money, where you can easily create your account.

After creating an account on any of these platforms, you will have to complete the KYC process. Actually, before investing in mutual funds it is necessary to complete the KYC process. For this PAN card and Aadhar card will be required. Apart from this, you can also do e-KYC online. In this process you have to complete KYC with the help of Aadhaar and mobile number. This is completed in a few minutes.

How to choose the right mutual fund

After creating an account, you have to choose the right mutual fund for investment. For this you have to do research on different mutual funds. Many times these platforms themselves suggest top mutual fund schemes for you. You can choose any one of these and do research on it and invest. However, before choosing a mutual fund, you must keep in mind your investment plans and goals. On this basis you should select mutual fund.

You can invest in two ways

You can invest in mutual funds in two ways. First, there is SIP (Systematic Investment Plan). In this a fixed amount has to be invested regularly. That is, every month a fixed amount will be automatically deducted from your account and invested in the mutual fund selected by you. The second method is lumpsum investment. In lumpsum investing you invest a large amount at one go.

How many types of mutual funds are there?

There are mainly four types of mutual funds. Equity Mutual Funds, Debt Mutual Funds, Hybrid Mutual Funds and Liquid Mutual Funds.

Talking about equity mutual funds, these funds mainly invest in the stock market. These are known for high risk and high returns. Equity funds are good for long term investments. Many types of funds come under it. Like- Large Cap, Mid Cap, Small Cap and Multi Cap.

Talking about debt mutual funds, these funds invest in government and corporate bonds. The returns of debt funds are stable and the risk is also less. These funds are good for those who want to invest with low risk.

Hybrid mutual funds come at third place. These mutual funds invest in both equity and debt. Hybrid funds offer investors a balanced risk and return. There are many types of hybrid funds such as balanced funds and asset allocation funds.

Talking about liquid mutual funds, these funds invest for a very short period of time and their risk is very low. These funds are suitable for cash management and generally give better returns than bank deposits.

Also read: Indians are buying property extensively in this Muslim country, know the main reason behind this