As there is a decrease in inflation in the value of money over a period of time, it becomes necessary to put your savings in the correct channel for investment. An unemployed amount if not put into investments will evade its purchasing power. Making right investments in the right time help to tide over the financial downs and also create a ground during retirement. There are ‘n’ number of investment options to be made with different returns and risk profile that help to cater to the investors needs.
Equities have the highest type of return and risk matrix while the postal services are on the lower type of return and risk matrix. You should invest according to the type of risk you are willing to take. Short term, medium term and long term are the various types of time horizons that you can choose from. Below we compare mutual funds with other types of investment funds.
Mutual Funds Vs Bank Deposits: the returns received from bank deposits become insignificant after the account goes through inflation and after paying a significant amount of tax. When it comes to mutual funds, most of the dividend/returns received are completely exempted from tax and the liquidity that is provided is higher than a lot of bank deposits.
Mutual Funds Vs Public Provident fund (PPF): PPF till date is one of the most popular forms of making investments. However, over a period of time the reduced returns and PPF has made PPF less attractive. The low returns also come at the cost of liquidity and growth. PPF also has a los
Mutual Funds Vs Institutional or Corporate bonds: financial institution bond have higher compounded returns and they are unsecured. Most of them are prone to interest rate risks when they compare mutual funds. Mutual funds are much more varied as they invest in a variety of instruments like money market and debt.