Life Insurance - Kotak Life Insurance Company in India

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What are Mutual Funds?

What are Mutual Funds?
  • 29th Aug 2022 |
  • 3,078


Mutual funds help you invest your funds in different classes such as equity, debt, and other assets. The scheme provides liquidity, accessibility, flexibility, and expert management benefits. Moreover, it is the best tax-saving option which is safe and transparent.

Increasing inflation rates have made investment a necessity to become financially secure. Several investment vehicles, such as Stocks, Bonds, Mutual Funds, Real Estate, etc., are available in the financial market. Though multiple options are available, we often plan to begin investing but stop due to insufficient time or knowledge. This is where mutual funds come into play. Mutual funds are considered one of the best investment options as your portfolio is diversified and managed by experts.

So, what is a mutual fund scheme, and what are the features of mutual funds?

Keep reading to understand the same.

Invest Today

What are Mutual Funds?

Mutual funds are like a basket of your funds allocated differently and managed by professionals. But what is mutual fund investment? Mutual funds scheme is a financial tool in which your money is invested in various assets such as equity, debt, and/or other money-market instruments. Investors can choose a short-term, mid-term, or long-term investment plan according to their preferences. Since the returns and capital gains directly depend upon the market volatility, a solid allocation strategy is required to minimize the risk. The funds are allocated in different securities according to the risk-taking appetite of the investor. The funds are managed by the fund manager (investment advisor).

What are the benefits of Mutual Funds?

1. Liquidity

Unlike conventional investment options like fixed deposits, mutual fund schemes provide liquidity. As a result, one can redeem their units quickly at any point in time. However, an appropriate penalty or exit load is applicable on the withdrawal.

2. Diversification

Most people hesitate to invest due to the instability created by market fluctuations and volatility. However, putting all the eggs in one basket is never a piece of wise advice. To minimize the risks of losses, mutual funds are generally diversified in various securities depending upon the plans and terms you opt for. In addition, mutual funds are pretty flexible as you can choose from multiple fund options such as equity, debt, other classes, or a hybrid scheme.

3. Expert management

Experts manage mutual funds with a deep understanding and thorough market knowledge. They know where to put your money for the safest and maximum outcomes. In addition, the fund managers take care of timely exit and new investments.

4. Flexibility and accessibility

There is enormous flexibility available to the investor regarding their investment, even when investing a comparatively low amount. One can invest monthly or quarterly using the Systematic Investment Plan (SIP) as per your convenience. Mutual funds can be easily traded when needed in a brief period. The excellent combination of low cost and ease of use makes mutual funds quite accessible. You can begin investing from anywhere in the world through brokerage firms, Asset Management Companies (AMC), or online investing platforms.

5. Transparency

Your financial advisors go through the statistics, financial statements, and other crucial understanding of the company before investing so that you can rest assured. In addition, however, you can track the performance of your funds using regular Net Asset Value (NAV) updates and monthly fund factsheets.

6. Tax benefits

What’s the fun of earning loads of money when a huge chunk is taken as a tax amount from your income? If you are smart enough, you can legally and ethically save yourself from the massive burden of income tax if you invest in mutual funds. Yes, you can avail tax benefits under Section 80C of the Income Tax Act for investments in Equity Linked Saving Schemes or ELSS. This is because the government wants its citizens to be financially secure and encourage the investment culture, following which these tax benefits are provided not only on the amount invested but also on the amount earned as mutual funds returns. This is a win-win for the investor, where your money sits in mutual funds, makes profits, and saves you taxes.


Investing in mutual funds is an excellent choice as you can put your money to work and grow wealth with even novice market knowledge. Also, as experts manage the funds, you do not have to worry about understanding mutual funds and the financial market. In addition, you are provided transparency, liquidity, the lowest lock-in period, and tax benefits with the mutual funds.

Kotak e-Invest

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

How to Manage Inheritance Money?

ULIP vs FD - Which is Better and Why?

Why Should You Invest in Term Insurance And ULIP?

How to Manage Your Portfolio Like a Professional?

3 Tips to Buy Guaranteed Savings Plan

Do You Know the Difference Between Savings and Investment?

Top 10 Investment Strategies to Create Wealth

Things to Know Before Buying an Endowment Plan

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Best Long-Term Savings Plans in India in 2022

How To Track ULIP Performance?

Savings Plan for Grandchildren

What are the Best Investment Options for Beginners or Amateur Investors in India?

Why ULIP is Better Investment for Long-Term Wealth Creation?

ULIP Benefits You Can Avail from Early Investing

Investments Options to Buy a house in India

What are the Best Short-Term Investment Plans with High Returns?

What are the Best Investment Options for Young Adults?

Creating a second source of income with life insurance

Best Investment Options in India in 2022

Learn About Safe Investments with High Returns in India

Importance of Portfolio Management

What are the Best Investment Options For Females?

Endowment Plan vs Fixed Deposit?

Best One-Time Investment Plans in India

Successful Financial Planning for Urban Women

How to Increase Net Worth Along with Family Protection

How Much Wealth Can You Create from ULIP in 10 years?

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

What are the Best Investment Options for Students in India?

How Do One-Time Investment Plans Work?

Receiving regular payouts at various stages of life

Are Gains from ULIP Sale Taxable?

What are Some of the Safest Investment Options in India?

Difference Between Guaranteed Savings Plan and ULIP

Which is a Better Investment - Mutual Funds Or ULIP?

ULIP Plan as a Gift

Why Should Parents Invest in Endowment Plan?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

4 Important Tips to Maximize Gains with ULIP Investments

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

How to Plan your Investment to Achieve Periodic Financial Goals?

Early Investing and the Power of Compounding

Benefits of ULIP as a Child Insurance Plan

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

What are Tax-Deferred Savings Plans?

How to Cancel ULIP Policy?

How to Plan Your Child's Education - A Step by Step Guide

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

Complete Savings Plan for Low Income Earners

Can ULIP Help in Achieving Short-Term Financial Goals?

What is a Savings Plan and What are is Benefits?

What's Better for Your Child's Education? Child Plans or Mutual Funds?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

ULIP as an Investment for Your Child

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Building wealth through regular investing

Safe Investment Options with High Returns for FY 2018-19

Is This The Right Time To Invest In ULIP? Why or Why Not?

Best Investment Options to Cover Your Child's Education

4 Benefits of ULIP Fund-Switching Feature

Top 5 Principles That Need to be Followed for Wealth Creation

Difference Between Passive and Active Investing

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

How to Start Saving Money in 10 Simple Ways?

Are Money Back Policies Helpful? A Complete Guide

Factors Affecting Stock Markets

Planning Financial Goals and Objectives of Financial Planning

How to Plan Savings from Salary?

Investment Options for NRIs in India

What are Deferred Savings Plans?

Learn About Safe Investments with High Returns in India

How To Diversify Portfolio In 2022?

Customising investments to manage your wealth

Planning for Your Child's Higher Education? Explore These Investment Options

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

How to Make Your Financial Portfolio?

Top 6 Investment Plans Available in India

Different Types of Endowment Plans

What is ULIP Renewal?

How to Fulfil Your Financial Goals in the Next 10 Years?

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

What is the Importance of Saving Money?

Important Questions You Must Ask Yourself When Buying a ULIP Plan

How Does an Endowment Plan Work?

Short Term and Long Term ULIP Plans for Wealth Creation

Who Should Invest in Savings Plan?

Top 5 Investment Options in 2022 for Healthy Returns

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

What is better - Guaranteed Savings Plan or Fixed Deposit?

Basics of Guaranteed Savings Plan

Why Do You Need A ULIP Plan - All You Need To Know

Asset Allocations in ULIP - Know the Top Benefits