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Brighten up this Diwali by investing in mutual funds Overall RATE RATE (0.00)

Diwali is a festival of lights that helps us transition from the shackles of darkness towards the prosperity and success. We consider Diwali a highly auspicious day for investing money, since that investment will invoke the blessings of Goddess Laxmi, bringing wealth and prosperity to the investor. Thus, why not look to invest in mutual funds this Diwali and invoke the blessings of Goddess Laxmi.

Generally, for most of us, investing has been saving money in fixed deposits, buying gold, or investing money in real estate. That said, we voluntarily or involuntarily ignore another very good form of investment – Mutual Funds.

Let’s try to understand what a mutual fund is and how it’s beneficial for investors. ‘Mutual’ refers to many individuals coming together and ‘Fund’ is nothing but money. Thus, mutual fund is a set up where many individuals come together and pool-in money for a common purpose. The purpose here is to benefit from the capital markets. One needs to note that these individuals neither have the required knowledge nor the time to manage these pools. However, they are very clear in their objective, which is to benefit from the capital market. Therefore, an Asset Management Company (AMC) appoints a fund manager to take care of this pool.

The fund manager is a knowledgeable professional who monitors the market continuously and buys corporate/government bonds, treasury bills, stocks, and various kinds of deposits to satisfy the investment objective of this fund. Investment objectives can be many, but one mutual fund will be driven normally by one investment objective. Therefore, for each of those objectives, which depends upon your risk-taking capacity and the time horizon you have for your investment, a mutual fund option will be available. You should invest in that kind of mutual fund, which matches your objectives.

Mutual funds are broadly divided into three categories – Equity, Debt, and Balanced funds. Equity funds are for those who want to invest only into equities to get maximum benefits from the stock market. Debt funds are for those who want to invest only into debt. Balanced funds are for those who want to invest in a mix of both, equity as well as debt.

ACMIIL has great news for you this Diwali. We have introduced state-of-the-art Investmentz App, which makes investing in mutual funds easy, secure, and effective. The app allows you to self-invest or seek expert advice. The best part is that the app helps you create your financial plan by setting your financial goals based on your risk propensity and time horizon requirement. The app will be your financial planner on-the-go. It will help you plan your mutual fund strategy, invest in mutual funds, and track the progress of your mutual fund portfolio real-time. This helps you in making timely changes to your portfolio to stay on track in terms of your financial objectives.

Happy Diwali!  

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4 things we need to know before starting an ELSS SIP Overall RATE RATE (0.00)

Most of us are aware of SIP method of investing in mutual funds and its benefits. MF SIPs help you invest small sums of money regularly every month. The best part is that you can start investing in ELSS mutual funds through SIP schemes.

You can start SIP for any type of mutual fund scheme. However, for ELSS, which is a tax savings mutual fund that allows you tax deductions for investments up to Rs. 1.5 lakhs under section 80C, SIPs in ELSS funds allow you to make tax savings every month. This is a very important point as ELSS is considered one of the best tax savings instruments.

Here are the 4 important things that you need to know before you start SIP for ELSS scheme

Select the scheme carefully

Considering equity market volatility, SIP is the best way to invest in an ELSS scheme. You must select the ELSS scheme carefully. The best way to start is to compare ELSS schemes in terms of their performance benchmarks over 1-year, 3-year, and 5-year horizons. This can be done by visiting websites of mutual fund players or by using credible online comparison tools. It is important to earmark a financial goal such as retirement for ELSS investment for which you are enrolling in the SIP.

Choose an appropriate SIP date

You should choose the SIP date carefully to ensure that you have enough funds to take care of the SIP on that date.

Know about SIP period

Typically, people get confused on lock-in period and SIP period of ELSS. Remember, ELSS has a lock-in period of three years when you don’t have access to your money. Moreover, you need not enroll for SIP for three years as many people mistakenly do. Please note that only SIP investments made in a Financial Year are considered for tax deduction. For example, if you start an ELSS fund SIP for Rs. 5,000 for three years in September 2016, you can avail a maximum deduction of Rs. 35,000 (7 months X Rs. 5000) or the amount equivalent to seven monthly investments.

Lock-in period

In case of ELSS investment through SIP, each SIP investment is treated as a separate investment, and has a lock-in period of three years for each SIP. For instance, if you started investing in ELSS through SIP in April 2016, you can redeem the first units bought in April 2016 only in April 2019. Similarly, units bought in May 2016, can be redeemed only in May 2019, and so on.

For more information on investing in ELSS funds through the SIP route, please give missed call on 08010968308

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