What Are Mutual Funds?

A mutual fund is a pool of money managed by a professional Fund Manager.

It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities. And the income / gains generated from this collective investment is distributed proportionately amongst the investors after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV. Simply put, the money pooled in by a large number of investors is what makes up a Mutual Fund.

Health and life insurance policies are important because they provide financial security in the event of medical emergencies or death: 

• Health insurance
  Covers medical expenses for illnesses and injuries, including hospitalizations and treatments. Health insurance can help you manage healthcare costs and protect your savings during medical emergencies. It can also help you catch lifestyle diseases early through regular medical tests. 

• Life insurance
  Provides a financial safety net for your family in the event of your death. It pays out a lump sum amount to your family to help manage medical expenses and secure their financial future. Life insurance payouts are usually tax-free. 

It's generally recommended to have both health and life insurance. 

When choosing a health insurance plan, you can consider things like:

• Coverage amount
  Make sure the plan covers your healthcare needs and potential medical expenses.

• Plan type
  Compare different plans to find one that suits your budget and healthcare preferences. 

In India, health insurance policyholders may be eligible for tax deductions under Section 80D. The maximum deduction is ₹25,000 for a policy that covers you and your family, and ₹30,000 for a policy that covers your senior parents.

Fixed deposits (FDs) are a reliable and safe way to invest money and grow savings over time. They are important because they offer a number of benefits, including: 

• Guaranteed returns: The interest rate on an FD is fixed when the investment is made, so you know how much you'll receive when the FD matures. 

• Higher interest rates: FDs typically offer higher interest rates than regular savings accounts. 

• Low risk: FDs are generally considered a low-risk investment. 

• Tax benefits: 5-year Tax Saving FDs can offer tax benefits under Section 80C of the Income Tax Act. 

• Flexibility: FDs can be used as security for a bank overdraft, allowing you to access funds without liquidating the investment. You can also break your FD partially or completely when needed. 

• Convenient: You can open an FD account online or by visiting a Us. 

• Insurance: In case of defaults, the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures deposits up to a certain amount. 

When you open an FD, you receive a Fixed Deposit Receipt (FDR) that serves as a record of your investment. It includes information like the deposit amount, interest rate, and maturity date.