Mutual Funds for Beginners

If you are a first time investor or just a beginner, this mutual funds for beginners guide is just for you. In this you will know the important things which you should know before investing in mutual funds.

Getting started with Mutual Funds

Before investing in Mutual Funds, there are some points which needs to be consider like:


  • Mutual Fund Portfolio – Knowing the company  of Mutual Funds or the fund’s portfolio to know in which companies the money is getting invested in. 


  • Knowing it’s historic performance – Though the future performance is not affected by past performance, but it can give you an overview of what returns the scheme has given over the past 1 or 5 years


  • The expense ratio – It is the fees charged to handle the investments by the fund houses. The lesser the expense ratio, the better it is. 


  • Exit load– Exit load is, if you sell your investments, then how much percentage of fee/ penalty will be charged


  • Tax implications – Both equity and debt mutual funds have different tax implications. It is important to know how your gains from mutual funds will be taxed. We have created a detailed video on it, you can find the link in the description box below. 


  • Lock in period – Some schemes like the tax saving ones, have a lock in period of 3 years. So, it is important that you have prior knowledge of the lock in period before investing.


Now, you can invest in mutual funds in 2 ways – 


  • Through an agent or broker (Regular) or
  • Direct


When buying through an agent, you need to pay the required commission to the agent as a fees as he/ she professionally takes care of your investments. As such, this commission is paid by the fund houses to the mutual fund advisor. But, ultimately it gets deducted from your earnings.


And, the second option is direct. When you invest directly, then you need not pay any commission. You can invest directly with the AMC (like HDFC Mutual Fund, SBI Mutual Fund, Aditya Birla Mutual Funds etc.) 

But, if you are new to the investments industry, it is good to go through a certified mutual fund advisor, who can professionally handle your investments. An advisor having an expertise in the industry, can very well guide you as to which funds would suit you according to your goals.

Whenever an investment is to be made, unbiased expert advice becomes important. 

If you are someone who is not a regular watcher of market activities or do not have the time to handle your investments, hiring an expert is the best decision you will ever make.

 If you are a first time investor in mutual funds, the first step is KYC registration. After your kyc has been verified by the registered authority, your investment in any mutual fund AMC can start. KYC is done only once and it is applicable under all the mutual fund AMC.

You can also invest in the name of a minor also.

For starting investments, if you are making Direct investment, then you need to contact the relevant AMCs.

Or, if you are making an investment through an advisor, he/she will take care of your investments. Through an advisor, you can make investments in multiple AMCs from one place. 

PAN number is necessary for starting investments. In case of investment in the name of a minor, the guardian’s PAN card is attached.

After your investment has been processed, a Folio number will be generated by the AMC. This folio number acts as the account number for your statement. You can track your current value of investments using the account number.

You can invest in as many mutual fund AMC as you want. There is no restriction on that.

When investing in Mutual Funds, you have 2 ways:

  • Lump Sum
  • Systematic Investment Plan (SIP)

Under lump sum, you invest one time whereas under SIP, investment is made in a specific scheme every month on a date specified by the investor.

This Mutual Funds for Beginners guide will help you know the basics and take the right step needed to get started.

If you want to start your investment in Mutual Funds, you can connect to us at or +91 9460825477