Everyone in this world wants to earn, earn and earn and this is because they all want to live a comfortable life with a good bank balance which they can utilize at the time of problem. Thinking this way started a race to earn more and more and this resulted in the development of new resources in market. Actually these resources were developed as per customer objective so that they can utilize it more and more hence get benefitted from it. The market was hence developed, the best part of market is that it continuously evolves itself as per demand. These things developed more trust among the people and hence customer and investor were developed. One who want to earn from market needs to invest some of their earning in market, these are called investors. There are several forms to invest in market, some of them are FOREX, mutual fund, share market etc. But we always look for the efficient one, efficient means to say which risk free, gives higher return is. These all things are fulfilled by mutual fund investment. Coming to its definition mutual fund is defined as “ A group of people coming together at a platform to create a portfolio by investing the money in stocks, securities, bills, etc. the profit earned is divided proportionally.”  Mutual fund is one of the best form of investment and there are several reasons behind it. Some of the reasons are

  • It is very simple form of investment without any complexity.
  • Market is wide hence making a lot of options available thus making it a diverse form of investment.
  • It is transparent, means you can record all the things happening to your money.
  • There is another definition of Mutual fund which is “The money is invested to a forum and then some skilled managers utilize the money and invests them so that the investor can earn.” So it is the best part of Mutual fund that it is managed by professional so the chances of loss is less.
  • Liquidity is there in the mutual fund means you can easily convert your asset in money.
  • It is tax efficient, although all of the subparts are tax efficient, some of them are having negligible amount of tax.
  • It costs less than other form of investment, and hence will increase your saving.

There are several subparts of Mutual fund investment. It is important to have some brief knowledge about it.


In this form of investment we generally buy stocks or shares of a company and the profit made through it is decided by ups and downs of the company.


In this form of investment the money is invested in buying bonds, securities of a company. It is good for those who wants less risk in their mutual fund.


It is one of the unique type of investment, the fund managers involved invests the money in many NAVs, and the profit generated through it is divided proportionally.


One of the safest form of investment, the money is invested in treasury bills, loans and commercial papers. Each having some maturity period and after the stock is matured it can be used to earn profit.


Unique type of investment scheme, it is because the mutual fund copies the index of the share market and the profit generated depends upon the ups and downs in the market.


These are hybrid form of investment and the money is invested in two mutual funds. Sometime the market is not constant and we can end up in loss. In this form of investment the percentage of equity is (70-80) % and that of debt is (20-30) %, thus making it one of the secured form of investment.


It is having same specification as that of balanced fund only difference is that the debt fund plays the majority role. The percentage of debt fund is (80-90) % whereas that of equity fund is (10-20) %.


Usually money earned through investment have to pass through a filter known as tax and this reduces the amount you have actually earned but when it comes to mutual fund there are options to nullify this filter cum tax.

A scheme known ELSS (EQUITY LINKED SAVING SCHEME) is the tax saving instrument which is present in mutual fund. These are diversified equity fund with a lock in period of 3 years.

Some of the benefits of ELSS are

  • One of the important section for fund investment known as Section 80C is applicable in case of ELSS and hence the income made is deducted as per the guidelines which is in favor of the investors.
  • There are several traditional methods for investment which generally use to have high lock in period usually 15 years, but for ELSS the lock in period is very less which is 3 years and it is the shortest lock in period available for any investment scheme.
  • The dividend during investment period is usually tax free and the profit gained through it is not a subject of tax.
  • ELSS usually invests in long term equity plans but despite of that it has the potential to give profitable amount of return.

This type of investment is best for those who are looking for rapid wealth growth, wants tax free investment and have the time horizon of 3 years.

Also one of the plus point of this mutual fund is its SIP plan, you can monthly deposit the amount you have fixed at a fixed date of the month. Proper planning is needed for this type of investment.


When it comes to save everyone wants to save more and more but in a legal manner. Tax reduces some of the amount you have earned through investment but we all know market evolves according to the need of the customer so ELSS scheme is there. With tax efficiency it also gives reasonable amount of profit and hence making it one of the best form of mutual fund investment.