5 Questions
Which of the following is a benefit of investing in mutual funds through SIP?
Rupee cost averaging
What is the minimum investment amount for a mutual fund SIP?
Rs. 1000
Which of the following is not a type of mutual fund?
Fixed deposit funds
What is the exit load charged on mutual fund SIPs?
Exit load is charged if the investment is redeemed within a certain period of time
What is the difference between a growth option and a dividend option in mutual funds?
Growth option reinvests the profits while dividend option provides regular dividends
Study Notes
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.
Test your knowledge on mutual fund SIPs with this informative quiz! Learn about the benefits of investing in mutual funds through SIPs, the minimum investment amount required, the types of mutual funds available, and the exit loads charged. Plus, discover the key differences between growth and dividend options within mutual funds. Sharpen your investment skills and take this quiz now!
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