A homemaker doesn’t bring money from a job or business, but makes efforts to manage her home impeccably. She saves money from the household expenses to contribute towards her personal and family’s desires. Instead of saving money at home, it is better to put it in different investment options, like recurring deposit, fixed deposit, government securities, mutual funds, and public provident fund (PPF), for increasing the amount of savings.
What are fixed deposits and mutual funds?
Investments can be fixed or dynamic. A fixed deposit (FD) provides a pre-defined return on the investment within a specific time period, while return from a mutual fund is linked to the fluctuations in the market.
Mutual funds provide better return on investment than fixed deposits in long-term
If you are investing money for a long-time that is more than 5 years then it is better to invest in mutual funds than in FDs. Mutual funds can multiply your savings better than FDs. For example, if money is invested for a period of 10 years and an average yearly return of 7% is assumed in a FD, then an average yearly return of 13% can be expected in a mutual fund.
Money can be withdrawn from mutual funds without loss of interest
In uncertain times, we might have to withdraw money from our investments. When money is withdrawn from a FD before maturity, there is a loss of interest rate. This is not the case with mutual funds. Any amount of money can be withdrawn from mutual funds with only an exit load of 1%.
What are the doubts about mutual funds? Are they true?
A homemaker may question mutual funds as an investment option assuming that her money may be at risk in mutual funds. Truth be told, though mutual funds are market-linked, but expert professionals, at the mutual fund institutes, manage your fund portfolio. Thus, your money is in safe hands.
A homemaker may find investing money in mutual funds difficult presuming that it requires hiring a broker and opening a demat account. The fact is that only a simple mutual fund account is enough for investing money in mutual funds. The account can be easily opened online at any mutual fund institute like bank, UTI, LIC, etc. The process of opening and managing a mutual fund account is less tedious than opening and managing a demat account.
You can independently manage your mutual fund account and do not need a broker. To begin with, it is best to invest in large cap funds that are mutual funds of well-known companies like Colgate, Reliance, Tata Steel, and others.
Conclusion
Though fixed deposit (FD) is a common investment option opted by middle-class households, a mutual fund is better investment for a long-term goal. It is time that homemakers clear their doubts about mutual funds and start investing in them to multiply their savings, and get applauded for fulfilling not only their but their family’s dreams.
What are your thoughts about mutual funds?
A technical writer in the field of life sciences, Aarti Bhola, pursued graduation and post-graduation in Biotechnology and Microbiology respectively. She is passionate about researching and writing informative content about any topic. A feather in her cap was her entrepreneurial venture, Melange Handicrafts, that sold lifestyle and home decor goods online. She continues to explore her artistic side via doodling and hand lettering.
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