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WAYS/MODES OF INVESTMENT IN MUTUAL FUNDS

An investor can invest in Mutual Funds through – i) Lumpsum investment and ii) SIP investment.

1)      Lumpsum : When a person invest a significant amount in a Mutual Fund in one go – the process is ‘Lumpsum’ amount investment. A lumpsum investment calculator helps to estimate the returns made by an investor on a lumpsum investment. It is a simple way to fill the necessary details and the calculator will compute an approximation of the maturity value based on the data provided. Investors can use this calculator to gauge the estimated returns on their lumpsum investments. A prospective investor can thus evaluate whether a selected investment option is meeting their financial goal at the end of the investment term or not. For example – If anyone has a sum of Rs 1lakh to invest then then the person could go for lumpsum investment and invest the entire amount of Rs 1 lakh at one go in a Mutual Fund as per choice. The units allotted will depend on the NAV of that fund on that particular day. If the NAV is Rs 1000, the person will finally end up getting 100 units of the Mutual Fund.

2)      SIP :  SIP is an investment tool which allows the investors to invest a fixed amount at regular intervals in any Mutual Fund Scheme. SIP works by investing a fixed amount at a definite frequency. With this, an investor does not need to time the market and can also invest in a hassle-free manner. SIP has been gaining popularity among the investors of Mutual Fund, as SIP helps to invest in a disciplined manner without worrying about market volatility and timing the market. SIP offered by Mutual Funds are easily the best way to enter the world of investments for the long term. It is very important to invest for the long term which means that you should start investing early in order to maximize the end-returns. This method of investment inculcates a discipline of investment and also eliminates any need to look for the right time to invest.

 The minimum amount for a lumpsum and SIP investments are defined by Mutual Fund Companies and can vary but can start at as low as Rs 100.