Mutual funds come in the form of a wide range of investment options, such as equity funds, debt funds, hybrid funds, and solution-oriented funds. Each of these options is designed to suit the different needs of different investors. You may choose the mutual fund scheme that suits your risk appetite, financial goals and investment horizon.
It is advisable to maintain a contingency fund for any future emergencies. The quantum of such a contingency fund is relative to different individuals depending on their committed payments, lifestyle expenses, etc.
However, as a generic measure, one should maintain a contingency fund equivalent to cover expenses for the current lifestyle for at least six months to have a sufficient financial cushion. Most people park their emergency funds in savings accounts because of liquidity and nil market-linked risks, however, they may offer interest as low as less than 3%.
Exit load is a charge levied on mutual fund investments if the investor makes a redemption before the end of the specified holding period. It is not uniform across mutual fund schemes; it may differ per the chosen scheme's investment objective and time horizon.
Exit load is applied to protect investors' financial interests, discouraging them from redeeming their investments too early. It may bring an essence of discipline in investors to remain invested for the scheme's minimum applicable time period and reap reasonable returns.
As per Securities & Exchange Board of India (SEBI) guidelines, liquid funds are mutual funds that invest primarily in debt and money market securities with a maturity/residual maturity of up to 91 days. Accordingly, such funds may invest in money market securities like Certificates of Deposits (CDs), Treasury Bills (T-Bills), Commercial Papers, etc.
A step-by-step guide on how to calculate what you might need in the case of an emergency.
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A prudent financial plan not only requires a well-chalked out investment journey for the achievement of financial goals but also maintaining a contingency fund for any future emergencies. As such, an emergency corpus of at least six months’ expenses is always desirable, so that you can enough financial cushion towards any unforeseen situation.
It is always advisable to hold an emergency fund corpus to meet any life contingencies. Such emergency fund should be equal to at least six months' regular expenses one needs to incur, for it provides sufficient financial cushion for any unforeseen situation in life. While maintaining an emergency fund is often on the agenda of many households, many savers keep such funds in the traditional savings accounts.
mutual funds have been steadily emerging as a preferred investment option and have become one of the attractive avenues to invest money. Such preferences arise from the convenience of investing in mutual funds and a wide range of mutual fund schemes investors may choose from. However, investors may often be spoilt for choices amongst the available options and may be struggling to find the right mutual fund scheme that best suits their financial plans and risk appetite.
As per SEBI (Securities & Exchange Board of India) guidelines on mutual fund schemes’' categorisation, liquid funds are debt funds that invest primarily in debt and money market securities with a maturity of up to 91 days. Accordingly, such funds invest in Treasury Bills (T-Bills), Commercial Papers (CP), Certificates of Deposit (CD), etc.
