Frequently Asked Questions about Mutual Funds
To build ₹50 lakhs in 5 years, you need disciplined investing in equity mutual funds:
• SIP Route: ₹60,000–₹70,000 per month with expected return of 12–14%
• Lumpsum Route: Around ₹28–30 lakhs invested today in equity funds
The key is consistency and choosing the right equity mutual funds. Plan and start your SIP today.
Yes, absolutely! Many mutual funds allow SIPs starting from just ₹500 or ₹1000 per month.
- A ₹1000 SIP for 10 years at 12% CAGR may grow to about ₹2.3 lakhs.
- Increasing your SIP amount over time (Step-Up SIP) helps you reach bigger financial goals faster.
👉 Start your ₹1000 SIP easily on our Invest Online page.
Investing ₹10,000 in mutual funds can create wealth over time:
- Lumpsum ₹10,000 in an equity fund for 10 years at 12% CAGR may grow to about ₹31,000.
- ₹10,000 per month SIP for 10 years at 12% CAGR can grow to nearly ₹23 lakhs.
The longer you stay invested, the more your money benefits from compounding.
👉 Try our SIP calculator and start investing on our Invest Online page.
The four main types of mutual funds are:
- Equity Funds – Invest mainly in stocks; best for long-term wealth creation.
- Debt Funds – Invest in bonds, government securities; safer and suitable for stability.
- Hybrid Funds – Mix of equity & debt; balance of risk and return.
- Liquid Funds – Very short-term investments; ideal for parking surplus cash.
📌 For beginners, Hybrid or Index Funds are a good starting point.
👉 Explore top funds and start investing on our Invest Online page.
The best mutual fund depends on your goals, risk tolerance, and time horizon. Equity funds are good for long-term growth, debt funds for stability, hybrid funds for balance, and liquid funds for short-term needs.
Consider factors like past performance, expense ratio, and fund manager’s track record. Start investing with expert guidance.
.The 7 types of SIP include:
1. Regular SIP – Fixed amount monthly
2. Top-up SIP – Increase SIP amount periodically
3. Flexible SIP – Vary amount based on cash flow
4. Perpetual SIP – No end date specified
5. Trigger SIP – Starts when market reaches certain level
6. Step-up SIP – Automatic annual increases
7. Multi SIP – Multiple funds simultaneously
You can buy mutual funds through:
• Online platforms like Xfundz Online
• Banks and their online portals
• AMC websites directly
• Financial distributors and advisors
Online platforms offer the convenience of comparing funds, tracking performance, and managing your portfolio in one place.
Debt funds and liquid funds are considered relatively safer than equity funds, but all mutual funds carry some level of market risk.
• Liquid Funds: Lowest risk, suitable for emergency funds
• Short Duration Debt Funds: Low risk with slightly better returns
• Government Securities Funds: Backed by government, lower credit risk
Remember: Higher safety typically means lower returns. Balance your portfolio based on your risk tolerance.
The best time to invest is NOW! Timing the market is difficult even for professionals.
Why anytime is good:
• Time in market beats timing the market
• SIP reduces timing risk through rupee cost averaging
• Compounding benefits increase with time
• Market volatility smoothens out over long term
Start small if you’re unsure, but start today!
A ₹5000 SIP for 10 years with ~12% returns can grow to around ₹11.5 lakhs.
This includes your total investment of ₹6 lakhs and returns of ₹5.5 lakhs due to the power of compounding. The earlier you start, the more time your money has to grow.
Yes, SIPs are flexible—you can stop, pause, or withdraw from open-ended mutual funds anytime without penalties.
However, consider:
• Early withdrawal may reduce your returns
• ELSS funds have a 3-year lock-in period
• Short-term capital gains tax may apply
• Long-term investing typically yields better results
No SIP guarantees 40% returns. Such claims are unrealistic and potentially misleading.
Realistic expectations:
• Equity funds: 10-15% long-term CAGR
• Debt funds: 6-9% CAGR
• Hybrid funds: 8-12% CAGR
High returns come with high risk. Focus on consistent, long-term wealth creation rather than unrealistic return expectations.
SIP is a disciplined way of investing that helps reduce the impact of market volatility through rupee cost averaging. However, returns are market-linked.
Safety depends on:
• The type of fund chosen (equity vs debt)
• Investment time horizon (longer is generally safer)
• Your risk tolerance and financial goals
SIP reduces timing risk but doesn’t eliminate market risk entirely.
Yes, daily SIP means investing a fixed amount every working day in mutual funds.
Benefits of daily SIP:
• Better rupee cost averaging than monthly SIP
• Smoother investment journey with smaller daily amounts
• Reduced impact of market volatility
Example: Instead of ₹3000 monthly, invest ₹100 daily (approximately ₹2200-2300 monthly depending on working days).
SIP investments are not completely tax-free, except for specific conditions:
• ELSS funds qualify for Section 80C tax deduction (up to ₹1.5 lakh)
• Equity funds: Long-term gains above ₹1.25 lakh taxed at 12.5%
• Debt funds: Taxed as per your income tax slab
Tax efficiency improves with longer holding periods. Plan your investments considering tax implications.
Starting a SIP is simple and can be done in minutes:
Step 1: Complete your KYC (Know Your Customer)
Step 2: Choose your mutual fund scheme
Step 3: Decide SIP amount and frequency
Step 4: Set up auto-debit mandate
Step 5: Monitor and review periodically
To earn ₹1 crore in 5 years, you need substantial monthly investments:
• Required SIP: ₹1.2–1.5 lakhs monthly in equity funds
• Expected returns: 12–15% CAGR
• Risk level: High (equity exposure needed)
This requires significant income and risk tolerance. Use our goal calculator to plan your strategy.
To double your money in 5 years, you need approximately 15% CAGR.
This can be achieved through:
• Equity mutual funds with good long-term track record
• Mid-cap and small-cap funds (higher risk, higher potential return)
• Sectoral/thematic funds (if sectors perform well)
Remember: Higher returns require higher risk tolerance and longer investment horizons work better.
To accumulate ₹2 crore in 5 years requires very high investments:
• Monthly SIP needed: ₹2.5–3 lakhs in equity funds
• Risk profile: Very high
• Alternative: Lumpsum of ₹1.1–1.2 crore today
This goal is suitable only for ultra-high net worth individuals with substantial income and high risk appetite.