What are mutual funds?
A mutual fund is a type of financial vehicle that combines shareholder funds to invest in securities such as stocks, bonds, money market instruments, and other assets. Fund managers run mutual funds, allocating the assets and attempting to generate capital gains or income for the fund’s investors. The portfolio of a mutual fund is set up and kept up to date in accordance with the specified investment goals in the prospectus.
What are the additional benefits of investing in mutual funds with 5paisa?
- Professional Management: Qualified fund managers oversee mutual funds.
- Risk reduction through asset diversification: Investing in bonds and stocks.
- Liquidity: Mutual fund units may be redeemed on any business day.
- Low Cost: Compared to stock investments, mutual fund investment plans are far more affordable.
- Tax advantages: Investments in mutual funds are tax effective.
- Well-regulated: Investing in offline and online mutual funds is subject to SEBI regulation, much like the stock market.
5paisa offers direct mutual fund investment at ZERO commission. You can also save on the expense ratio if you invest in Direct Mutual Funds.
What documents do I need to submit while opening an account with 5paisa?
With 5paisa you can open two types of accounts – An All-in-one Account & Mutual Fund Account
Both the accounts have basic KYC document requirements like –
- Pan Card
- Aadhar Card
- Bank details
- Signature (in digital form)
Check the entire list of documents required to open an account with 5paisa
Can I stop or cancel my sip?
Yes, you have all the rights to stop or cancel your mutual fund SIP at any given point. You can stop SIP using the following steps:
- Go to MF order book
- Click on the SIP section
- Click on the scheme you wish to stop
- Click on Stop SIP
- Choose a reason and click on stop SIP
How are mutual fund withdrawals taxed?
Your short-term capital gains will be subject to a 15% tax rate plus surcharge and cess.
If your long-term capital gains exceed this amount, you will be subject to a 10% tax rate and lose the indexation benefit.
Additionally, if you have invested at least Rs 1.5 lakh, you may be eligible for tax relief. If your tax level is 20%, you can save up to Rs 30,000.
If you invest for 36 months for debt funds, your returns after indexation are taxed at 20%.
Who gets the money that I invest in mutual funds through 5paisa?
Professional money managers manage mutual funds at 5paisa, also called fund managers. These fund managers pool money invested by people for the fund and re-invest your money on your behalf into various asset classes. They make investments based on the scheme’s objectives to give you the promised returns. They decide when to buy a specific security and when to sell it.
What are the different types of mutual funds?
Equity funds, Debt funds, Money market funds, Hybrid funds and Schematic funds are some of the different types of mutual funds.
Do I need a demat account for investing in mutual funds with 5paisa?
Stocks, bonds, mutual funds, and other types of securities can all be kept in a demat account with 5paisa. Additionally, it is user-friendly and provides you with a host of advantages. To purchase mutual funds, a Demat Account is not necessary.
How much can I Invest in Mutual Funds in a month?
The 50:30:20 guideline must be used to your financial plan. One should put at least 20% of their income into mutual funds, and they should increase as much as they can.