Dec 19, 2017 4 min read

Does My Money Get Locked Up in Mutual Fund Investments?

In mutual funds, money does not get locked up, it gets invested! Know more!
Investment in mutual funds is one of the most trusted and trendy options. Due to its beneficiary behavior, it has been selected by billions of investors to fulfil their investment purpose. One cannot doubt the limelight it is achieving, however, there are a few myths that still prevails in the active society of investors. One such frequently asked questions is “does my money get locked up?”

If you too have any such doubt in your mind and because of that fear you are not investing in mutual funds, then you must note the two important facts about mutual fund investments:

Firstly, in mutual fund schemes, the money you park gets invested and not locked. The money always stays yours, and you can easily get it back at any point in time as and when required. The process of mutual fund investment allows you to simply buy the units of various schemes, and then the money that you pay to purchase those units is what makes the investment amount. This amount is managed by a professional fund manager to earn profits on it. When you redeem your investment after a significant period of time, you yield an increased amount on your investments which is termed as returns.

Secondly, you always have an access to your money. So, to think that your money will get locked up is a complete waste. The structure of mutual fund investments ensures the accessibility of your investments. It depends on you that when you want to redeem your money, partially or fully. The mutual fund companies also allow you to pre-specify the redemption dates by giving a standing instruction to transfer a fixed amount into your bank account on a predetermined date every month, quarter, or as you choose it to be. You can even transfer your money from one mutual fund to another by using the switch and STP facility, but both the scheme should be under the management of the same mutual fund company.

Moreover, there are many more features of mutual funds that can help you in availing higher benefits of investing in them. So, rather then feeling that your money will get locked up, it’s better to understand the truth. Go ahead and invest in a mutual fund scheme which suits your investment objectives, and enjoy the accessibility, transparency, and liquidity of them. If you see mutual fund investments in another context, it is a superior investing experience, while being under the protection of professional managers.

Therefore, the mutual fund is one of the best investment options which can help you fetch high benefits along with better returns on your investments. Some of the major advantages of investing in mutual funds are:

  • Variety of Options: When you step into the world of mutual fund investment, you get a wide range of mutual fund schemes which are categorised on the basis of various parameters. So, you get solutions to all kinds of financial requirements. Different mutual fund category helps meeting different investment goals.
  • Inbuilt Diversification: You must have heard the famous quote which to “Don’t put all your eggs in one basket.” It has been said to prevent loss of all the eggs if any danger comes to the basket. So, putting them proportionately in different baskets can prevent you from losing all the eggs at the time of any uncertainty. Mutual fund investments are quite similar; they also help you in attaining diversification. Besides, you can diversify your portfolio by adding different categories of schemes to it and also by investing only in one scheme because MF schemes are inbuilt diversified.
  • Affordability: One of the best features of mutual funds that also serves as its benefits is the affordability. One can easily buy them with the investment amount as low as Rs. 500 through Systematic Investment Plan (SIP). Moreover, it is much more economical to invest small amounts regularly remove than paying a bigger one at a time.
  • Easy to Invest: Investment in mutual funds is a very easy process, and one need not bother about the hustle and bustle thinking that it is similar to the share market trading. There are experts to manage your investments in the best possible manner. You also do not require to examine the market scenario all the time once you made your investment. The fund manager will take care of the portfolio of the scheme in all market situations.
  • Liquidity: This is one of the benefits of mutual fund investments, and at the same time, one of the important topics for this blog. Yes, liquidity is the primary requirement of the investors who ask questions like, ‘does my money get locked up?’ In mutual funds, you can redeem your money as and when required (except ELSS). So, you can choose a preferable mutual fund as per your requirements.

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Henceforth, with a plethora of benefits and higher returns on investment, mutual funds is considered superior to all other investment options. There are many easy ways to start investing in mutual funds. Our clients are experiencing all such benefits and allowing their money to grow through mutual fund investments using our platform, i.e., MySIPonline. We are one of the fastest growing online mutual fund investment services providers in India. So, get associated with us right away to experience the new view to mutual fund investments.