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 instalments 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 make 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.