Mutual Fund investment is the current hot topic in India. People have slowly realised the importance of investing and not just saving their earnings. The Mutual fund is a very good source of investment for a minimum sum of ₹ 500 to huge sums in crores. The Mutual Funds managers invest the collected corpus of different investors and allocate the amount in different securities to earn returns. The mutual funds investors can freely choose their choice of mutual funds from a variety of schemes as per their preference and needs.

Mutual Funds Types

Mutual Funds are classified into many types on the basis of different criterion like securities invested in, entry and exit conditions, and other factors. Let us discuss further the types of Mutual Funds. The Mutual funds are broadly classified in open-ended and close-ended funds.

Open-ended Mutual Funds: The investor is free to enter and exit from such type of mutual funds at any given time. The investor can buy or sell their units in the mutual funds at the Spot NAV on the given date of transaction. Most of the Mutual Funds are open-ended and do not have a fixed maturity term.

Close-ended Mutual Funds: These mutual funds are the opposite of open-ended funds. These funds have a fixed maturity term and are open for investing only during the launch period.

Here are the different types of Mutual Funds present in the Indian market on the basis of securities invested in-

1. Growth or Equity schemes: As the name suggests, these mutual funds are for investors who wish to invest in the stock market. This is a highly risky form of investment as the share market is very volatile and can be bullish or bearish due to many direct and indirect events happening all around the world. Long-term investors prefer these mutual funds to avail themselves the benefit of growth in stocks.

2. Liquid or Money market funds: These Mutual funds are preferred by investors who want to invest for a short period of time. Securities that are mostly invested in are corporate bonds, certificate of deposits or commercial papers.

3. Debt funds or Fixed income Mutual Funds: It is one of the mutual funds with the least amount of risk for the investors, as the mutual funds managers invest in fixed income securities like government bonds, debentures, which follow the low-risk-low-return policy. This mutual fund scheme is ideal for investors looking for steady income.

4. Balanced funds: These Mutual funds invest in a way to maintain a balance of the debt as well as the equity in the fund invested by the mutual funds' manager. This combination offers a moderate return to the investor with comparatively lower risk than the equity or growth funds.

5. Gilt Mutual Funds: These are a very safe form of investment, as the securities invested in are only government securities. This fund is preferred by the risk-averse investors mostly.

Mutual Funds calculation

It is very accessible to calculate the returns from the mutual funds you are investing in. Many sources and tools are available online for mutual funds calculation purposes. The mutual funds calculator estimates the returns from a particular mutual fund. You just need to fill in a few details and click submit or OK; then the calculator will give you the information that you need. There can be majorly three types of calculators-

Lumpsum Calculator: Under this calculator, enter the amount that you are potentially going to invest in one go or lumpsum. Set the time period you wish to invest that amount for and also enter the expected average return from the mutual fund scheme. Then it will provide you with the value of the sum that you will receive at maturity.

SIP Calculator: This is very similar to the lumpsum calculator, the only difference being that lumpsum requires a one-time investment. But under the SIP plan, the investor has to deposit smaller amounts in instalments, which can be monthly, or quarterly, semi-annually or yearly. SIPs are preferred by investors who cannot invest a huge amount in one instalment.

Goal calculator: Person can also invest in the mutual funds as per the amount they want to accumulate after a given period of time. And according to your expected return, desired maturity amount and time period, the calculator will provide you with the amount that you need to invest, whether lumpsum or in SIPs. For example, you wish to save ₹ 25 lakhs for your dream car and purchase it in the next 5 years. You can easily get the information from the mutual funds calculator that you need to invest at least ₹ 29000 monthly for five years when the minimum expected to return in 15% on the investment.