Are You a Mutual Fund SIP Expert?

Benefits of Mutual Fund SIP

• Investing in mutual funds through SIP (Systematic Investment Plan) helps in averaging the cost of investment, as a fixed amount is invested at regular intervals, regardless of the market's performance.

Minimum Investment Amount

• The minimum investment amount for a mutual fund SIP varies from one fund to another, and can be as low as ₹500 or even ₹100.

Types of Mutual Funds

• There are various types of mutual funds, including Equity, Debt, Hybrid, Sector, Index, and Fund of Funds, but not a 'Pension Fund' (which is a type of retirement plan).

Exit Load

• An exit load is a fee charged by the mutual fund when an investor redeems their units, typically ranging from 0.5% to 2% of the redeemable value, and is usually applicable for a specific period, say 1 year, from the date of investment.

Growth Option vs Dividend Option

• In a growth option, the returns are invested back into the scheme, increasing the number of units held, whereas in a dividend option, the returns are distributed to the investor as a dividend, reducing the number of units held.