Best Mutual Fund Options to Invest a Lump Sum of Rs.1 Lakh

Updated on: Jan 13th, 2022

|

3 min read

You might have received gratuity from your employer, or the RD account you had opened a while ago might have matured, leaving a lump sum of Rs.1 lakh in your hands. Wherever the corpus is coming from, you might be looking for the prospect of investing this lump sum in mutual funds to gain reasonable returns.

However, deciding on the best mutual fund options to invest your money depends on the duration you are willing to stay invested and how much risk you are ready to take. We suggest the following steps for you to arrive at the right mutual fund scheme for you.

Step 1: Identify the category of mutual funds you would like to invest in. Experts suggest that you go for equity funds if you are sure to stay invested for a minimum of five to seven years. If you are on the risk-averse side or would like to remain invested for up to three years, you can go for debt funds. If you want to raise the merits of both worlds, you can go for hybrid funds.

Step 2: Choosing the right fund under the selected category is another crucial step. While you are looking out for the fund options, keep the following factors in mind:

  • Check for the performance of the fund over the past year, three years, and five years. Ensure that the fund you choose has been performing consistently over these periods.
  • Make sure the assets under management for the fund are adequate, not too high nor too low.
  • Check if the returns from the fund are higher than the category benchmark.
  • Analyse if the asset allocation of the fund is in line with the investment strategy of the fund.
  • Track down the fund manager’s effectiveness in asset allocation in the past.

Step 3: Since it is not possible to point at one particular fund as the best fund, it is recommended that you diversify your portfolio and invest in more than one fund to reduce the risk.

inline CTA
Invest in Direct Mutual Funds
Save taxes upto Rs 46,800, 0% commission

Public Discussion

Get involved!

Share your thoughts!

summary-logo

Quick Summary

Tips for investing lump sum in mutual funds based on risk appetite and investment duration. Steps include choosing fund category, analyzing fund performance and asset allocation, and diversifying portfolio.

Was this summary helpful?
liked-feedbackliked-feedback

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption