LIC has some Plans which are NAV-based because those funds are invested in the market and LIC’s NAV is similar to Mutual Fund NAVs. Here we will talk about Mutual Fund NAV’s.
If you want to check your LIC NAV then you may search for it on Life Insurance Corporation’s Website.
Also Read: LIC Policy Status Online
If you want to make an investment in the share market or in a mutual fund there are various things that you should know. So from these, Today I am going to discuss NAV. It is very important for you to understand what is NAV. if you want to invest in a mutual fund. Those who do not want to directly invest in the stock market or do not know the stock market can invest in the mutual fund. By investing in the mutual fund, your investment is in the hands of experts, and in this way, you can reduce the risk of direct investment in the stock market. Today, we will learn here that what is the NAV in the mutual fund, how it is counted and how important it is.
First of all, what is NAV
Net Asset Value, or NAV, means the value of the total property. Net asset value, or NAV, in any of the mutual funds, after deducting the liabilities from the total value of all the shares of the portfolio, including cash, the outstanding balance is obtained by dividing it by the total number of units remaining.
Also Read: ULIP vs Mutual Fund
NAV fund is per unit’s total asset value (excluding expenditure) and at the end of each day’s business, it is calculated by the asset management company (AMC) of that fund. On any given day, if that mutual fund is terminated, then the unitholder of that mutual fund will get the price for each unit as per the rate of that unit of that day. In a way, you can say that NAV is the book value of any mutual fund unit.
Most of the unit’s base value in the mutual fund is Rs 10 or Rs.100. In each business day, the NAV curve of the unit increases according to the market value of the fund’s portfolio.
Also Read: ULIP How it Works?
Importance of NAV
NAV refers to the growth of the unit of a mutual fund. If you invest Rs 12 per unit in a fund at NAV and after one year, if the NAV of that unit goes up to 15 rupees per unit then that fund has 25% growth. It is wrong to believe that the mutual fund with lower NAV will give good returns and the mutual fund with more NAV funds will give fewer returns.
From the NAV of any fund, it can be known that how any fund has performed in the past but in the future how any fund will perform cannot be decided by the NAV. So it all depends on market condition, It can go up or down.
Also Read: ELSS Mutual Fund
Where To Check NAV?
You can check NAV of your Mutual Fund company’s website or Directly go to AMFI’s website
If you are a regular investor you may know all these but if you are new then kindly read all the terms and conditions and risks involved before investing in any fund.
ELSS or Equity Linked Savings Scheme is also called First Mutual Fund Scheme. Because most investors like to invest in mutual funds only under ELSS.
You can decrease your tax deduction by investing in ELSS, under Section 80C of the Income Tax Section, up to 1.5 lakh rupees annually. It has been observed that many investors start investing in ELSS so that they can save tax and then gradually they start to participate in other mutual funds and equity schemes.
If you are still thinking that ELSS is better for your tax saving or other government schemes, then my today’s article may prove beneficial for you because I am going to discuss this topic today.
If you are not investing in ELSS for tax saving then you should consider it again on your decision. Look for tax saving, many options are available such as public provident fund (PPF), National Saving Certificate (NSC), etc., where you will definitely get assured returns.
Also Read: Tax saving options
But when you compare ELSS with the other tax-saving scheme offered by the government, you will find that there is a lock-in period of 3 years in ELSS. whereas the other government schemes like PPF and NSC there is at least 5 years of the lock-in period.
Returns of the money invested in ELSS are very good when compared to any other tax-saving scheme proposed by the Government. I would like to say that in order to meet your long-term financial goal government tax saving schemes will fail, while ELSS is better and gives you handsome returns to reach your financial goals.
Yes, it is a different thing that investing in ELSS can be a little risky compared to tax-saving schemes operated by other governments because ELSS invests in the stock market, which is risky for a short time. Therefore, to invest in ELSS, you should make your mind for long-term investment, for example from 5 to 7 years. So that you will earn better returns in the ELSS.
It is supposed that ELSS has a risk, but you get a reward for taking risks. For instance, those who invest in ELSS in the last few years have been given tax-free returns of about 13.52 percent in three years and 17.29 percent in 5 years, and 9.83 percent in ten years. Which is much more than other government schemes.
Also Read: How to Invest in Mutual Fund
If you are having your interest in investing in ELSS then here are some of the following schemes which have given good returns in the last few years.
- L&T Tax Advantage Fund
- Aditya Birla Sun Life Tax Relief 96
- DSP Black Rock Tax Saver Fund
If you want to invest in these ELSS Schemes, then I will suggest that you should invest under a Systematic Investment Plan (SIP) and invest for a minimum period of 5 years, or else the best option will be that you should invest in ELSS for the long term financial goal. So that returns will also be a better amount and risk will be significantly reduced. Last but not the least, invest in the market after reading and understanding all the risks involved.
Tax planning is one of the major tasks for some people. They were at various stages of tax planning at any point in the financial year.
Some people want to invest as soon as possible and some people are looking for a very good tax savings option and some people want to know about the best tax-saving mutual fund scheme.
So in today’s article, I am going to tell you about the same, that is ELSS.
What is ELSS Mutual Fund?
The Mutual Fund Scheme or Equity Linked Savings Scheme (ELSS) is a very good way to save tax under Section 80C. You can invest up to Rs.1.5 lakh to save income tax in ELSS equity under the above section mentioned. Like all the other tax-saving options that come under Section 80C, ELSS also has a lock period of 3 years.
If you are thinking of investing in ELSS, it will be better this year to save your income tax that you start investing right now. Apart from this, this option provides financial discipline and also you get a lot of time to discuss in which scheme of ELSS you should invest.
Also Read: What is SIP
How can you invest in ELSS Mutual Fund?
Just go to the company website where you can invest in a lump sum or you do not have to do more than just have to start a systematic investment plan that is SIP in ELSS Tax Saving Mutual Fund Scheme. As soon as you start a twelve-month SIP, your money is automatically invested every month in the tax-saving scheme.
Also Read: How to Invest in Mutual Fund?
Is there any risk in investment in ELSS?
ELSS scheme is a type of equity mutual fund scheme that invests in the stock market. As we all know that the stock market is an unstable system that has fluctuations, so if you are ready to take the risk, then only you should invest in ELSS.
As mentioned, this scheme has a lock-in period of 3 years but I will suggest you if you have time for five to seven years only then you should invest in this scheme.
Most of the other tax-saving options offered by the government provide certain income, but the returns are very low. Investing in the stock market by ELSS is likely to get good returns in the long run.
What are the best ELSS Mutual Funds?
The following are the recommended ELSS in 2017 who have given a good performance in the last few years.
- DSP Black Rock Tax Saver
- Axis Long Term Equity Fund
- Birla Sun Life Tax Relief Ninety Six
- Franklin India Taxshield.
Also Read: Tax Saving Schemes in India
As it has been clearly said that “Mutual fund investment is subjected to market risk”. when some people heard this sentence they get feared but If you have researched well about the market and various scheme then you can earn good income in ELSS. But yes I will suggest you make enough research then and then only invest in any fund because we all know that money cannot be earned easily.
What is SIP (Systematic Investment Plan)?
For those who do not have much information about the stock market or share market, investing through SIP is a better way to reduce the risk of the investor. SIP is a method of investment and savings under which any investor keeps investing in a fixed amount in their shares or mutual fund. In simple words, it can be said that if you don’t have enough money to invest in one time then you can invest using SIP that enables you to move towards your goal monthly or for a fixed term. You can also invest in commodities like gold through SIP. SIP makes the investment easier and the investment continues in disciplined ways and also reduces the risk of investment.
SIP stands for the systematic investment plan. But I would like to call it a sort of investment plan. In an interval of equal time in SIP, an equal amount is invested in one item. An investor has Rs.50,000/- to invest and he does not want to invest them all on the same day due to risk factors. Now he can choose to invest in SIP for ten months at a rate of Rs.5,000/- per month that will also reduce the market risk for him.
Nowadays, Banks also offer SIP through a savings bank account. once you give them standing instructions they will continue deducting the SIP amount from your bank account directly and investing in the mutual fund on your behalf by their experts.
Features of SIP
- Any investor can invest in the share market, mutual fund, or gold ETF through SIP.
- Investment intervals can be kept per day, per week, or per month. This is an easy way of investing for salaried professionals.
- Large investments can be made in a regular and disciplined manner by saving some salaries every month.
- SIP can be started by giving an advance check-in to any mutual fund or giving online instructions.
- SIP can also be made from a small amount of Rs 500 per month.
Benefits of SIP
1. Small investment
It is easy to save a small amount for investment. For a long time, the investment of a small amount can give you big returns.
2. Risk factors are less
Actually, when you invest a heavy amount at once and the market goes down then think about what will happen. SIP reduces such risks as the amount of money you save is not at one time.
3. Easy to invest.
As the investment in SIP can be done by directing online. On a fixed date the fixed amount is directly transferred to the mutual funds in which you have invested in your chosen plan.
At last from my point of view, If you want to invest in a share market or mutual fund, you should go further with SIP. Whether you have a heavy amount with you or a small amount to invest. The market is full of ups and downs. one wrong decision can cost you a big loss and one good decision can make you earn a lot. So it’s all about our own sense think and think once again before making any investment.
Nowadays our television screens are flooded with mutual fund advertisements. Everybody wants to know about it. As I have discussed the mutual fund in my recent article about what is a mutual fund and its type. Today I am going to discuss various points about how to purchase a mutual fund and how to invest in mutual funds. Where to buy mutual funds. It should be brought online or offline, which is the formalities that have to be completed and all.
How to buy a mutual fund?
This will be the very first question that will arise in your mind that how to buy a mutual fund? Mutual funds can be bought both offline and online. There is various companies available in the market from where you can purchase a mutual fund. All you have to do is before investing in a mutual fund, you should thoroughly research and decide which asset management company to invest in a mutual fund scheme.
Examine different types of mutual funds, their investment objective, and past performance. However, the previous performance cannot be guaranteed that in the future, any mutual fund scheme will perform as it has performed earlier. But yes the chances are less of degradation of performance chart.
Now there are various ways to purchase a mutual fund.
1. Online purchase:
To invest online in a mutual fund, you can invest online by going to the site of a mutual fund asset management company. The names and web addresses of mutual fund asset management companies you can found on the search engine or visit SEBI.
2. Offline purchase:
You can use the services of a financial intermediary to make an offline investment in a mutual fund. These are called mutual fund distributors. You can invest in mutual funds directly by going to the office of the mutual fund company. A bank, non-banking finance company, or personal financial advisor can be a mutual fund distributor.
3. If you have a Demat account with a broker, you can also buy a mutual fund from that broker. In this way, the mutual fund purchased will be deposited directly into your Demat account.
Note: Whether you buy offline or online mutual funds, you can also order a SIP purchase in your form. For this, you can also give your bank details and ask for an automatic purchase.
Formalities for buying mutual funds:
In order to purchase a mutual fund, you will have to fill out a KYC form and provide a passport size photograph along with proof of identity and a copy of the residence address.
Also Read: ULIP vs Mutual Fund
Purchasing a mutual fund is not a big task but finding the best place for investing your saving for a better return is a tricky game. Mutual fund investment is really good and can be proved to be the best place for all types of investors. Put a habit of investment from today and see your future dreams come true. Small investments made in mutual funds can be a huge amount for one day.
Disclaimer: Mutual fund investments are subject to market risk, please read the offer document carefully.
ULIPs and mutual funds are similar types of investments but not the same. As we know mutual funds are more into investments; whereas ULIPs are into investments as well as insurance. When we look into the basic concept the difference between the two is very small, and mainly consists of product structure and risk coverage.
The basic difference evolves regarding its regulation. The ULIPs are regulated by the IRDA, whereas mutual funds are regulated by the SEBI. Then the other important aspect is when we look from an industrial point of view, the main focus of mutual funds is on low costs while the main focus for the ULIPs lies in the better performance and the distribution of its products. The other aspect includes flexibility, in this case, a ULIP allows us to increase our life cover, and at the same time are premiums rates remain the same. This is achieved by reducing our investments. On the other hand, you don’t get any life cover in mutual funds. The only option we are left with is purchasing a new insurance policy which would ultimately lead to additional cost.
The other important point to be focused on involves that even if the costs of the investments in ULIPs are more compared to Mutual funds, the ULIPs offer better products that are suited for long-term investments, whereas mutual fund products can only be used for sole purposes or short term returns. And one more point which acts as a beneficiary in terms of insurance is, that we do not receive any insurance cover in mutual funds whereas we receive insurance cover in ULIP plans.
Mutual Funds and ULIPs both are subject to market risks; if something unfortunate happens to an investor, the family or nominee will receive only fund value. On the other hand, ULIPs will give your family a guaranteed sum assured in case of the death of the policyholder.
As these investments are the most preferred investment options to invest. even a small drawback somewhere makes a strong impression in our minds. So in the case of ULIPs vs Mutual funds, if we notice, ULIPs are more preferable even if both stand at the same level. Somewhere when we equate both the investment options ULIPs are more beneficial as well as flexible as per our requirements.