1. Which type of mutual fund is best for beginners?
Due to their lower volatility and consistent returns, large-cap or index funds are generally suggested for beginners.
2. Is SIP better than a lump-sum investment?
SIPs help most investors avoid market-timing risk and promote regular investing.
3. How long should one stay invested in mutual funds?
Equity mutual funds usually need at least 5 to 7 years, or even longer, for substantial growth and diversification of risk.
4. Are small-cap funds safe?
They offer higher returns but also carry higher risk. Only long-term, aggressive investors are acceptable.
5. Can mutual funds help with tax savings?
To answer the question, ELSS mutual funds offer tax benefits under Section 80C, with a 3-year compulsory lock-in period.