Mutual Funds – FAQ’s
Frequently Asked Questions
Mutual Fund – (FAQs)
A mutual fund is a professionally managed investment scheme that pools money from multiple investors to invest in stocks, bonds, or other assets. It offers diversification, expert fund management, and easy access to various financial markets.
When you invest in a mutual fund, you’re buying units of the fund based on its Net Asset Value (NAV). The fund manager uses the collected money to buy assets like shares or bonds. Your investment’s value grows (or falls) based on the performance of those assets.
SIP (Systematic Investment Plan): You invest a fixed amount regularly—monthly or quarterly. It’s ideal for disciplined investing and handling market volatility.
Lump Sum: A one-time investment of a larger amount. It suits investors with a sizable fund and a long-term investment horizon.
Mutual funds are regulated by SEBI (Securities and Exchange Board of India) and offer transparency and investor protection. However, like any investment, they carry risks depending on the fund type (equity, debt, hybrid). Selecting funds aligned with your risk profile is key.
Equity Funds: Gains held for more than 1 year are taxed at 10% (above ₹1 lakh). Short-term gains (under 1 year) are taxed at 15%.
Debt Funds: Gains after 3 years are taxed with indexation benefits; short-term gains are added to your income and taxed as per your slab.
Tax-saving options like ELSS (Equity Linked Saving Schemes) offer deductions under Section 80C.
NAV (Net Asset Value) represents the per-unit value of the mutual fund. It’s calculated by dividing the total value of assets in the fund by the number of outstanding units.
Yes, unless it’s a lock-in fund like ELSS. Most open-ended mutual funds offer flexible withdrawal options, but some may have exit loads if redeemed early (typically within 1 year).
No. Returns depend on market performance and fund category. While debt funds are relatively stable, equity funds can offer higher returns with more risk. Always check past performance, fund ratings, and your own goals.
Anyone with financial goals—whether saving for retirement, children’s education, or wealth creation—can invest. With options for every risk profile, mutual funds are suitable for beginners as well as experienced investors.
At Lifeguide, we offer:
Risk profiling & fund recommendations
Goal-based investment planning
SIP & lump-sum setup
Regular performance tracking
Tax-efficient portfolio guidance
Plan. Protect. Prosper.
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