Money is the main driver that makes people work hard. It is the biggest motivator also. Many people love to save the amount for the future and invest them in different avenues that can help them meet their short and long term goals. Though it depends on the person where he wants to invest his saved amount, some of the avenues can be very helpful. Usually, every investor wants to save his hard earned money in a field where he can get a good return, but there is no risk, or less risk is associated with the concerned option. In the market, one of such beautiful option is saving in a mutual fund.

What is a mutual fund?

A mutual fund is an option where one can find a close-ended or open-ended scheme.  The investor is provided with a folio number and units which he can get after investing the amount. The price of the units here depend on the scheme and varies regularly. As the amount invested by all the investors in a mutual fund is invested in the share market, with the increase of the market, the unit prices go up and decrease of the same go down. One can go for direct mutual fund investment in this era as there are many asset management companies which offer such option to the investors. In case one wants to go through a broker, he can also go for the same easily.

The risk and return: it is necessary for the investor to check the risk associated with his investment and see how much return he gets. Usually, mutual fund investment is considered as a medium-term investment option, and hence, one has to take moderate risk. One can reduce this risk and increase the return if he goes through the direct mutual fund investment, which is also an easy option.

The plans:

Every Asset Management company has a vision for the specific fund and accordingly, it follows the investment options in the market. There are also some options where one can have tax benefits as well. The companies offer open and close-ended options, which mean one can invest the amount, but on the redemption of the units, there are certain restrictions. In the open-ended option, there is no such restriction, and one may have to bear a charge while redeeming the units, but he can redeem the unit at any point of time. In close ended option one cannot withdraw the amount for a number of years which depend on the terms and conditions provided by the AMC at the time of the investment.

The redemption:

In simple terms, redemption is nothing but the withdrawal of the amount. One can go for full redemption or partial redemption as per his choice. One needs to raise the redemption request to the concerned company and if it is an open-ended option the company accepts the same and provides the amount as per the NAV of the date when the redemption request was raised. Hence to invest and get a good return in a mutual fund is easy and simple.