New Delhi | Abhinav Gupta: The financial year is nearing its end and this is the time when the salaried class and investors start making investments in order to save on income taxes. One of the most popular options to do that is investing in mutual funds which qualifies for deductions under Section 80C.

However, what creates a hurdle in going ahead with the fruitful option for many of us is the lack of understanding about the mutual funds and how to invest in them to gain maximum benefits.

Keeping in mind the view of informing our readers and help them make the right decision on investing in mutual funds, Jagran New Media’s Manish Mishra and Abhinav Gupta held an in-depth discussion with SEBI-registered investment advisors Jitendra Solanki and Manikaran Singal under Jagran Dialogues.

Here the excerpts of the panel discussion with the investment experts:

Q.What are mutual funds? How can we invest in them and why?

Manikaran Singal: Mutual funds are a way through which you can invest in different investment asset classes. There are only four ways on making an investment - equity, debt, gold and real estate - and when we don’t invest directly in them and rather go for a professional management service, then the option of mutual funds comes up.

Mutual fund is a pool where small investors bring their money together according to the objective of the fund and the goal of the fund manager and then the objective decided by that fund house is handled by the professional management which diversifies the funds to meet the goal.

So basically, where you are not directly equipped to make an investment on your own, where you need an expert’s assistance to add up your money gradually, mutual fund can be a helpful product there.

Q. Why go for mutual funds when we can invest in FD, NSC? How can they be beneficial for us?

Jitendra Solanki: Mutual funds come with a range of asset class options like equity and debt and the latter further comes with several choices. When we talk about traditional deposit like FD, there are two major factors taken into account - first is taxability, i.e. the tax liability on the earning made from the investment and second is inflation - which are difficult to overcome.

So, when we plan a long term investment, we need options where we can let go these factors and this choice is available with mutual funds, specially for a small investor who wants to start investing with an amount as low Rs 500 or Rs 1,000.

Watch the complete panel discussion here:

Posted By: Abhinav Gupta