Everything you need to understand Mutual Funds in India — from basics to advanced strategies. Free, unbiased, expert knowledge. Education only — not investment advice.
A mutual fund pools money from many investors and invests it in stocks, bonds, or other securities, managed by a professional fund manager.
SEBI officially categorises all mutual funds in India into 5 broad categories and 36 sub-types. Each has a different risk level, return potential, and ideal investment horizon.
Invest in stocks for long-term wealth creation. Includes Large Cap, Mid Cap, Small Cap, Flexi Cap, Multi Cap, ELSS, Sectoral and more. Best for 5+ year horizons.
High Risk · 10 Sub-TypesInvest in bonds, treasury bills and fixed income instruments. From Overnight and Liquid funds to Dynamic Bond and Gilt funds. Ideal for short-to-medium goals.
Low Risk · 16 Sub-TypesMix of equity and debt. Balanced Advantage, Aggressive Hybrid, Multi Asset, Arbitrage and more. Great starting point for first-time investors with a 3–5 year view.
Moderate Risk · 7 Sub-TypesPurpose-built funds for Retirement Planning and Children's Future. Come with a mandatory 5-year lock-in to promote disciplined, goal-focused investing.
Varies · 2 Sub-TypesPassively track a market index like Nifty 50 or Sensex. Very low cost, no manager bias. ETFs trade on exchanges. Fund of Funds invest in other mutual funds including global ones.
Moderate Risk · 3 Sub-TypesRead our complete guide — every SEBI-defined fund type explained in plain English, with risk levels, who should invest, ideal horizon, and Top 5 funds for each category.
Explore All Fund Types →A beginner can start investing in just 15 minutes. Here's exactly how.
India's capital market regulator governing all mutual funds under SEBI (Mutual Funds) Regulations, 1996.
The self-regulatory body ensuring ethical practices and investor education across the MF industry.
Tax treatment depends on fund type and holding period. As per Finance Act 2024 (effective July 23, 2024).
| Fund Type | Holding Period | Gain Type | Tax Rate | Notes |
|---|---|---|---|---|
| Equity Funds (≥65% equity) | < 12 months | STCG | 20% | Increased from 15% in Budget 2024 |
| Equity Funds (≥65% equity) | ≥ 12 months | LTCG | 12.5% | First ₹1.25L/yr exempt; was 10% earlier |
| Debt Funds | Any | STCG / LTCG | As per slab | Indexation removed post-April 2023 |
| Hybrid (Equity-oriented) | ≥ 12 months | LTCG | 12.5% | Same as equity if equity allocation ≥ 65% |
| ELSS Funds | 3 years (lock-in) | LTCG | 12.5% | Tax deduction ₹1.5L under Sec 80C (old regime) |
| International / FoF | Any | STCG / LTCG | As per slab | Treated as debt funds for taxation |
| Liquid / Money Market | Any | STCG / LTCG | As per slab | Gains taxed at applicable income slab rate |
Expand your knowledge with our in-depth articles and 35+ answered FAQs — all free, unbiased, and built for Indian investors.
Long-form 8–10 minute articles that go deep on every mutual fund topic. Each includes a feedback form.
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