Compound interest is received on mutual fund investment. Simple interest is available in FD and other schemes. There has been record investment in SIP during July.
New Delhi. Small and retail investors have found a formula to earn profits. People are investing a lot of money every month. Association of Mutual Funds in India (Amfi) released the data and said that in the month of July also, investors have invested more than 23 thousand crores in this option. This is the highest amount ever invested in a month. Investors put the most money in this option because the interest in it is calculated on a special formula, which the great scientist Einstein had described as the eighth wonder.
Actually, we are talking about the Systematic Investment Plan (SIP) of mutual funds. AMFI has said that in the month of July, the monthly contribution through SIP i.e. Systematic Investment Plan increased to the highest level ever at Rs 23,332 crore. In the previous month it was Rs 21,262 crore. According to AMFI data, this is the 41st consecutive month when net investment flow has increased in equity funds.
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What is Einstein’s 8th wonder
Mutual funds can be invested in both SIP and Lumpsum mode. In both these methods, you get the benefit of compound interest. If you make an FD in a bank, then you get only simple interest on it. Compound interest means that you will be paid interest next year on the interest received this year. In this way, year after year, the interest money gets added to the principal and your small fund also turns into a big corpus.
Investment in equity funds decreased
According to AMFI, the investment flow in equity mutual funds declined by 9 percent on a monthly basis to Rs 37,113 crore in July. The total flow was low due to a decrease in investment in shares related to large, small and medium companies. However, despite the decline, the net investment flow figure in July is the second highest in any month. The investment flow in June was Rs 40,608 crore.
Increased discipline among investors
AMFI Chief Executive Officer Venkat Chalasani said, “This reflects the increasing financial discipline among retail investors. This helps them to build a good corpus systematically over time.” Overall, the mutual fund industry witnessed an inflow of Rs 1.9 lakh crore in the month under review, while there was a withdrawal of Rs 43,637 crore in June. This inflow was through investments in equity as well as bond schemes. In the next three-four years, the number of investors in the mutual fund industry will cross 10 crore.
Tags: Business news, Mutual Funds, Mutual fund investors
FIRST PUBLISHED : August 9, 2024, 18:49 IST