Getting a good return on investment is the prime motto of every investor. In most of the cases, the investor who has limited saving cannot get a good return as either he has to take a high risk or he has to satisfy with low return. In some of the investment avenues, there is no liquidity, and in some, there is liquidity but may have to incur loss also. There is only one option where one can invest the amount with safety and get a good return. It is a mutual fund investment. Here the investment is provided to companies which have got experts to manage the fund and also get good return without compromising the invested amount.
The type of funds:
There are different types of funds available in
the market. One can go for a fund with a large cap, small cap or even with
medium cap. Every company has various schemes that are designed by the expert
keeping certain aspects in mind. Looking at all these aspects if the investor
believes that investment in this scheme may prove helpful to him in achieving
his goals, he can go ahead with the investment. Hence for a retail investor, it
is necessary to find the right scheme and option first.
He also needs to see that he has a clear
financial goal with him. He needs to know the amount he will require at a certain
period and hence come to know the amount that he needs to save every month. He
can start investing in SIP where the amount can be invested in monthly
instalment and hence, whether the market goes up or down, he can keep on
investing and deriving the benefits of the mutual fund.
There is also a tax saving mutual fund in the
market which can help one save tax up to 150000. It is a provision by the
government under section 80C. Among the leading tax saving tools, one can consider this as a viable option where he can also
invest the amount in monthly mode and still get the tax benefit. Here one can
also save the amount being influenced by the recession in the market as one can
have a beneficial situation in the bullish or bearish market if he has invested
in SIP. It is an easy to invest tool that can offer tax-saving also.
For the individual investor who wants to save
tax and invest in ELSS, there must be an ELSS
investment calculator that can help him find the required amount after the specific
investment period. This calculator can help one reduce the tax liability and
also get an excellent return on the amount invested. Hence one can have both
benefits if he goes for this option.
The investment options:
Before going for this option, one needs to know
the investment option that can help him invest in a mutual fund without any
hassle. There are online as well as offline options of investment with the help
of which one can invest in the concerned mutual fund option. Those who are not
much aware of the online option can go for the offline mode where physical
documents and cheque need to be given to the broker or company. In online
options, one does not go anywhere as he can upload the document on the site and
transfer the fund online only. Hence investing in ELSS or any other mutual fund
is very easy. The investor needs to check the mutual fund schemes of various
companies before selecting any of them. He needs to see the rate of return and
amount invested as well as NAV and lock-in period, which can help him plan
rightly. The investor can also consult an expert for such guidance or check the
data on the internet, which can help him take the right decision.
Why go for the ELSS?
ELSS is an easy option to save tax liability up
to the amount of 150000. However, here, one needs to note that there is also a lock-in
period, and hence, one cannot withdraw the amount until that period is over.
The ELSS can help one get a good return on investment as the amount is blocked
for a minimum of three years. Hence in such a period, one can have a good
return from the market. If one goes for the payment of tax, he needs to pay it
together, but if he wants to save the amount he can save it with the help of
ELSS by SIP. In this option, he can save some amount every month, which can get
good return also.
The available options:
Usually, in a mutual fund, one can get options
such as dividend and growth. In dividend option also there are some more
options such as dividend reinvestment and payout. In dividend reinvestment, the
amount whatever is paid by the company needs to be invested again in the same
scheme, while in dividend payout the client gets a cheque for the amount he may
have earned as a dividend. In the growth option, the NAV of the units keep on
increasing, and hence, the fund value of the folio of the client also gets
increased. Overall one can say that the investor in ELSS is always in benefit
only. Hence it is considered as a viable option for those who love to save tax
and get a good return on the same also.
Is investment in mutual fund safe?
Yes, investment in this option
is very safe as the system has got excellent transparency with the client that
can help the client know the situation of his investment and folio. The folio
contains all the information about the investment. One can get the NAV from the
site or from the company call centre which can help him know the situation of
his funds. There are also customer care centres and offices of all the
companies that can help the investor get the best services in case of
redemption, change in information or even investment. Hence overall one can
rely on this option to have a good saving and effective portfolio.
