Monday, January 16, 2023

Universal Account Number (UAN) – Check UAN Passbook and Other Services

The salaried individuals in India are allotted an exclusive identification number known as Universal Account Number or UAN.  Let us take a look at the details of UAN and its importance, in this post.

The Universal Account Number lets an employee contribute a share of their salary to the EPF account. The EPFO or the Employer’s Provident Fund Organization allots this number to every salaried individual. This unique number makes identifying PF accounts easy and hassle -free for the employees. Let us understand the UAN in detail.

Visual Stories by PayBima

What is a Universal Account Number (UAN)?

The Universal Account Number means a 12-digit unique number that is issued by the government of India and is controlled by the Employment and Labour Ministry. This unique number is assigned to all salaried employees who contribute a share of the salary in their EPF (Employee Provident Fund) account.

You may note that the UAN is allotted to an employee only once and can never be changed again. So, all through the professional life of a person, the UAN number remains the same despite the number of job changes. However, every new employer might allocate a new member identification number to the employee which finally gets linked to the primary Universal Account Number from the previous organization.  Hence, with every job switch the new member ID is linked to the already existing UAN and it stays unchanged.

How to get a Universal Account Number (UAN)?

A UAN number is allotted to an employee from various sources such as:

  • You can get it from your Employer – As per the guidelines of the EPFO, employers assign the UAN number to the employees. Some employers print the UAN on the salary slip of the employee
  • You can get it through Online UAN Portal – In some instances, where the employer does not provide the UAN to the employee, they get it online through the UAN Portal

Here are the steps that an employee can take for Universal Account Number (UAN) registration online:

  • Visit the UAN website https://unifiedportal-mem.epfindia.gov.in/memberinterface/
  • Go to “Know your UAN” and click it
  • Submit your mobile number and the captcha given on the page
  • Now click the “Request OTP” tab
  • You will be redirected to a different page. Here, fill in the basic details like
  • Name
  • Date of Birth
  • Aadhaar card number or PAN Card or Member ID (whichever is applicable as per requirement)
  • Submit the captcha and click on the “Show my UAN” tab
  • Finally, you can see your UAN number on the screen

How to Activate your UAN Number?

Only having a UAN will not be enough if it is not activated.  Hence, if an employee wants to activate their UAN online, they must have UAN as well as PF member ID.

Below are the steps to follow if you want to activate your UAN on the EPFO portal:

  • Visit https://epfindia.gov.in/site_en/
  • On the main page, click on the services tab and go to the tab called “For employees”
  • Now, scroll down and click on ‘Member UAN/ Online Service (OCS/ OTCP)’ tab
  • Here, you will be redirected to the UAN portal https://unifiedportal-mem.epfindia.gov.in/memberinterface/
  • Click on the “Activate UAN” tab located in the low right
  • Fill in all the required details like:
  • UAN
  • Aadhaar card number
  • Name
  • Date of Birth
  • Mobile number
  • Captcha mentioned
  • Now click on ’terms & conditions’
  • Finally, click the tab of “Get Authorization Pin”
  • You will receive an OTP on your registered mobile number
  • Under the disclaimer box, enter the OTP received on the mobile
  • Now Validate the OTP received and activate UAN
  • Once the UAN gets activated, you will be sent a password on the mobile to access the UAN Account

Highlights of UAN

Here are the key highlights of the Universal Account Number:

  • UAN is a number created once in a lifetime, it never changes
  • UAN stores the data related to your PF account in one place
  • UAN helps the EPFO in different ways, such as:
  • In getting the bank details of the employee
  • KYC of the employee without asking the employer
  • Tracking down the number of switches made by the employee
  • UAN has lowered the ratio of untimely withdrawals of EPF

Benefits of UAN for Employees

  • UAN helps the employee to withdraw money online easily from the PF account
  • Balance can be transferred or carry-forwarded easily
  • Further, it also allows the employees to track down any past withdrawal, deposit, current balance, etc.
  • It allows transparency between the employee and the employer, which minimizes the chances of fraud
  • Employees can keep a regular Universal Account Number check on the PF contribution to confirm whether their PF amount is being regularly deposited by the employer or not

Documents Required for UAN

The following documents are needed at the time of opening your Universal Account Number (UAN):

  • Bank details – Bank name, IFSC Code, Account number, Branch name
  • Identification proof – Passport size photographs, Aadhaar card, Driver’s license and Passport, etc.
  • Address proof – Electricity bill, Voter ID card, Ration card, etc.
  • Among other documents, Aadhaar Card is mandatory
  • Also, it is compulsory to link Pan Card to UAN
  • ESIC Card is another requirement

To Conclude

Whether you are a government employee or a private job holder, it is very useful to have UAN or Universal Account Number India. Tracking employee history in terms of their professional life becomes easy with Universal Account Number login. Hence, every salaried person must have a UAN.

Found this post informational?

Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.

 

View this post on Instagram

 

A post shared by paybima (@paybima)

FAQs on Universal Account Number

What is a Universal Account Number in India?

UAN is a 12-digit identification number, which is assigned to every salaried individual by the government, which makes managing EPF easy.

How to have a Universal Account Number sign in?

You can sign in to the UAN by using PF number or your member ID via the UAN portal. Once you visit the UAN portal, click on the ‘know your UAN’ tab. Now enter the registered mobile number along with the captcha code to verify.  You will receive an OTP on your mobile. Submit the OTP number and validate it by clicking on the validate opt button. Next, you have to enter your details like name, DOB, Aadhar etc.  and click on ‘show my UAN’ to get the UAN number. 

Can I have two UAN numbers?

No, you cannot have two UANs. It is illegal to have two UANs at the same time. A member should have only one UAN, and all the EPF accounts must be linked with it.

What is the number of digits given in the UAN?

There are 12 UAN digits allotted in the Universal Account Number by your employer as the original Universal Account Number. When you switch jobs, any new member identification number allotted by the new employer gets linked to the primary UAN.

The post Universal Account Number (UAN) – Check UAN Passbook and Other Services appeared first on Paybima Blogs.

PLI Calculator: Postal Life Insurance Online Premium Calculator

A PLI Calculator or Postal Life Insurance Premium Calculator is a tool available online to calculate and compare the premiums of different Postal Life Insurance Plans. Let’s understand the PLI calculator in detail, in this post.

When an individual plans to buy a Postal Life Insurance policy, they like to check on different PLI plans and their premiums before choosing the one which suits them the most. By using a PLI calculator comparing premiums of various PLI plans becomes an easy task. PLI Calculators offer a rough approximation of the premium which is required to be paid for a policy. Hence, the policy seeker can choose to buy a particular plan depending on their requirement and affordability. Let us take a look at the PLI insurance plans and the PLI calculator in detail here.

Visual Stories by PayBima

About Postal Life Insurance (PLI)

The postal life insurance (PLI) is regarded as one of the oldest schemes of life insurance in India offered by India Post department. India post with its extensive pan India presence offers a range of different services and products. The Postal life coverage is one of their exclusive products offering a remarkable mix of best features.

The PLI plan was initiated long back in 1884 as a welfare scheme aimed at the employees working in the postal department. Later, in 1888 the plan was extended to the employees of the telegraph department as well.

Like in the case of other term life insurances, PLI also offers death benefit to the nominee of the insured in the event of sudden death of the insured during the term of the policy.

It is interesting to note that in 1894, PLI became the first ever insurance policy to consider insurance coverage for women employees of the then P&T Dept. As it is known, the Postal Life Insurance has seen exceptional growth over the years.

Postal life insurance offers several life insurance plans and a policyholder can determine the premium of PLI plans by using the PLI premium calculator. There are over 6 PLI plans being offered by the Postal Department of India.

Know More: Postal Life Insurance (PLI) Surrender Value Calculator

Postal Life Insurance – Types

Here are the popular PLI plans that one can choose from:

Name of Policy Entry Age in Years Loan Facility Sum Assured  Bonus Declared Last
Endowment Assurance (Santosh) Min – 19 

Max – 50 

Available after 4 years Min – INR 20,000

Max – INR 50 lakh

NA
Whole Life Assurance (Suraksha) Min – 19 

Max – 55

Available after 4 years Min – INR 20,000

Max – INR 50 lakh

INR 85 per INR 1000 sum assured per year
Joint Life Assurance (Yugal Suraksha) Min – 21 

Max – 45 

(For spouses)

Available after 3 years Min – INR 20,000

Max – INR 50 lakh

INR 58 per INR 1000 sum assured per year  
Convertible Whole Life Assurance (Suvidha) Min – 19 

Max – 50 

Available after 4 years Min – INR 20,000

Max – INR 50 lakh

INR 85 per INR 1000 sum assured per year
Anticipated Endowment Assurance (Sumangal) Min – 19 

Max -40 yrs for 20-year term plan, 45 yrs for 15 yrs term plan 

NA INR 50 lakh (Max) INR 53 per INR 1000 sum assured per year
Children Policy (Bal Jeevan Bima) Min – 05 

Max – 20 (For Children)

NA INR 3 lakh (Max Sum Assured)  NA

PLI Calculator – Benefits

Here are some benefits of using a postal life insurance premium calculator:

  • Being an online tool, the PLI premium calculator is easily accessible to people at no cost and can be accessed anytime and as many times as required
  • You do not need to register in the website to use the calculator
  • The use of calculator saves time as well as it allows the policy seeker to get accurate information
  • The calculator can be used by anyone anytime from anywhere in the world
  • All you need is to provide the correct information to get the approximate estimation of PLI premium.

Read More: PLI (Postal Life Insurance) Interest Rate on Loans 2022-23

Factors Affecting PLI Premium Amount

Below are the factors considered for determining the premium of PLI plans.  The user of the post office PLI calculator has to offer these details to calculate the premium.

  • Age of the insured – This is the first thing that a PLI calculator would ask for from the user. This is because age of the insured directly impacts the premium of a policy. The older the insured is, the more the premium is charged.
  • Monthly income of the insured – This is again a very significant detail to know as it impacts the premium. As per the income and the affordability of the insured, the premium is levied on the insured
  • Sum assured – Sum assured is directly related to the premium levied on an individual. If the coverage is higher, the premium will be greater and vise-versa.
  • Premium paying duration – The time when the policyholder stops paying policy premium is another determining factor of premium amount. With high ceasing age, the premium paid becomes lower.

Why is the Postal Life Insurance Calculator Needed?

All citizens of India who are working with the below mentioned organizations can purchase the PLI plans conveniently:

  • Employees of state and central government
  • People working in NSE and BSE in certain sectors
  • Employees of autonomous bodies
  • Employees of RBI
  • Employees of Financial Institutions
  • Paramilitary and defense workers
  • Public sector employees
  • Employees of educational institutions aided by government of India
  • Employees of deemed universities
  • Employees of commercial and nationalized banks
  • Employees of co-operative society

How to use a PLI Calculator?

Below are the steps to be taken to use PLI Calculator:

  • Visit Postal Life Insurance portal
  • Click on the tab of ‘Buy Policy’ on the main page
  • You will be redirected towards a new page where you have to submit certain details correctly
  • Now enter the captcha image and click on the tab of ‘Get Quote’
  • You can see the PLI monthly premium on the screen displayed

What details are required for using the PLI Calculator?

Below are the details required to submit by an individual in the PLI scheme calculator to get approximate results:

  • Policy name
  • Date of birth
  • Contact Number
  • Gender
  • Email ID
  • Pin Code
  • Sum assured
  • Monthly Income
  • Policy end date

To Conclude 

The postal life insurance policies are best in terms of coverage and the premium rates. Further, these plans offer bonuses to the policyholder, which help them to accumulate a substantial amount of money over the term of the policy.

However, before you choose the exact policy that you want to buy, it is better to use the postal life insurance calculator to help you to make an intelligent choice of plan. PLI calculator support by providing the approximate estimation of the premium to be paid for various PLI policies.

Found this post informational?

Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.

 

View this post on Instagram

 

A post shared by paybima (@paybima)

FAQs on Postal Life Insurance Online Premium Calculator

How is the PLI premium Calculated?

To calculate PLI premium, one can use the PLI premium calculator. This online tool is easy to use and offers almost accurate results.

How different is a PLI from other insurance plans?

PLI are different because they can be availed by semi government and government employees. Other insurance policies can be accessed by everyone alike. Also, PLIs offer bonuses at economical premiums.

Is LIC better or PLI?

PLIs are better as compared to LICs or any other private insurance plans because they are cost-effective and allow bonuses at affordable premiums.

What is the minimum and the maximum sum assured offered under PLI schemes?

The minimum sum assured is INR 20,000, while maximum sum assured is INR 50 lakh (except in Bal Jeevan Bima plan with maximum sum assured of INR 3 lakh).

The post PLI Calculator: Postal Life Insurance Online Premium Calculator appeared first on Paybima Blogs.

Zurich, ICS reveal partnership to create new captive

Captive's "sustainability lens is unique in the group captive marketplace," executive says



from Insurance Business https://ift.tt/qUTM4K5
via IFTTT

Texas mayor arrested on insurance fraud charge

Alleged fraud occurred prior to mayor's election just last year



from Insurance Business https://ift.tt/vXuEDJn
via IFTTT

How to apply for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana?

The Indian Government has initiated many reasonable schemes and policies lately to secure the health of its people. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana is one such scheme that allows health coverage to all. Do you know how to apply for this scheme? Let’s find out!

Visual Stories by PayBima

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) is the Government of India’s flagship health insurance scheme that was launched with the aim of offering universal health coverage to the people of India, especially the economically deprived people. The scheme was introduced as per the recommendations of the National Health Policy 2017. Under this scheme, over 18 crore PM-JAY health cards were issued by the government till March 31, 2022.

With the PM-JAY initiative, the government endeavored to offer a comprehensive health insurance facility by incorporating a holistic approach. Hence, PMJAY offers health prevention and health promotion along with ambulatory care in different levels. The Ayushman Bharat Scheme has two connected components, such as;

  • Pradhan Mantri Jan Arogya Yojana (PM-JAY)
  • Health and Wellness Centres (HWCs)

Ayushman Bharat Yojana – Target Group

The PM-JAY scheme is mainly targeted at the economically low sections of the society. Hence, the poor and deprived people of rural and urban areas along with some categories of occupational workers in the urban areas are primarily targeted.

With the PM-JAY Scheme, the government wants to cover nearly 50 Crore Indian population including rural and urban families as per the Socio-Economic Caste Census (SECC) data of 2011.

Under the scheme, each family eligible for the plan receives a health cover of INR 5 lakh every year on a family floater basis.

Process to Check for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana Online Eligibility

The PM-JAY scheme is applicable for all beneficiaries who are identified under the SECC 2011. Also, the scheme includes the beneficiaries who have been a part of RSBY scheme.  The eligibility for the scheme can be checked via the NHA or National Health Authority Portal. If you are eligible, you can apply for the scheme by following the below process. Here are the steps to Ayushman Bharat Pradhan Mantri Jan Arogya Yojana apply online process:

  • First the applicant needs to log in to the official website of the scheme – mera.pmjay.gov.in
  • Enter your contact number along with the captcha code that you can see on the screen
  • You will receive an OTP in your mobile number. Enter the OTP and you will be redirected to the login screen of PM-JAY
  • Now, you may select the state where you reside and from where you want to apply for the scheme
  • Here, you can check for your eligibility criteria by using details of your Name, Phone number, Ration card number, or RSBY URN number
  • In case you are eligible, your name will feature on the right-hand side of the screen
  • Now, you can click on the ‘Family Members’ tab to check the beneficiary details

How to Check Eligibility Offline

Further to this, the eligibility for PM-JAY can also be checked by dialing the Ayushman Bharat Yojana call center number: 1800-111-565 or 14555 or by approaching an EHCP or Empaneled Health Care Provider.

Other Health Insurance Companies

  • aditya-birla-health-insurance-company
  • care-health-insurance-company
  • bajaj-allianz-health-insurance
  • cholamandalam-health-insurance
  • go-digit-health-insurance
  • kotak-health-insurance
  • niva-bupa-health-insurance
  • new-india-assurance-health-insurance
  • star-health-insurance
  • iffco-tokio-health-insurance
  • magma-hdi-health-insurance
  • manipal-cigna-health-insurance-company
  • iffco-tokio-health-insurance
  • liberty-health-insurance
  • ICICI-Lombard-Health-Insurance

How to register name for Ayushman Bharat Yojana?

For quick Ayushman Bharat Pradhan Mantri Jan Arogya Yojana registration online, you can follow the below mentioned steps:

  • First complete the eligibility checking by visiting the PM-JAY official website at https://pmjay.gov.in/
  • The names of the eligible applicants are displayed on the right side of the webpage
  • Fill up the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana online form to proceed with the Ayushman card online registration
  • You might be asked to attach scanned copies to support your documents
  • Now, you have to submit the form together with the attached documents
  • Once done, the relevant authorities will process your application
  • After your application gets approved, you will be issued an online Ayushman card will be issued in PDF, which you can download

Does the PM-JAY work on an entitlement basis?

Ayushman Bharat PM-JAY scheme is an entitlement-based scheme which decides the eligibility criteria on the basis of SECC database.

  • In case of rural areas, the beneficiaries are categorized as D1, D2, D3, D4, D5, and D7 on the basis of deprivation as per the SECC database
  • In case of applicants in the urban areas, the entitlement is determined as per 11 occupational criteria
  • Further, among the applicants also includes the beneficiaries of RSBY or Rashtriya Swasthya Bima Yojna

Let us now take a look at the basic differences between the features of private health insurance policies as compared to Ayushman Bharat Yojana to get better understanding.

Read More: Pradhan Mantri Ayushman Bharat Yojana Benefits, Features, Inclusions and Exclusions Under PMABY

Differences between Private Health Insurance V/S the Ayushman Bharat Yojana

Features Private Health Insurance Ayushman Bharat Yojana
Health check-up Free periodic health check-up allowed No free health check-up allowed
Sum insured Up to INR 3 Crore (Max) Up to INR 5 lakh (Max)
Pre and post hospitalization coverage 60 days pre-hospitalization and 180 days post-hospitalization coverage allowed 3 days pre-hospitalization and 15 days post-hospitalization coverage allowed
Coverage of critical illness Allow coverage of up to 20 critical diseases Allow coverage for 9 critical diseases
OPD expenses and home treatment OPD coverage and home treatment OPD and home treatment not covered
Premiums Normal premium Government pays premium on behalf of the applicant
NCB or No Claim Bonus You get NCB for every claim-free year No NCB benefit is offered
Tax Benefits Tax deduction can be claimed under section 80D No tax benefit is allowed

Found this post informational?

Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.

 

View this post on Instagram

 

A post shared by paybima (@paybima)

FAQs on Ayushman Bharat Pradhan Mantri Jan Arogya Yojana

What is the PM-JAY enrollment process? Is there any time duration for enrollment?

The PMJAY is an entitlement-based health policy with no specific enrollment procedure. Families that are identified under the scheme are done on the basis of deprivation and occupational criteria. The scheme utilizes the SECC census data to determine the beneficiaries under the rural and urban criteria.

What benefits can be received from the PM-JAY Scheme?

The benefits received under Ayushman Bharat Yojana include a family floater health insurance coverage for a sum insured of up to INR 5 lakh per year. Under this scheme, all the pre-existing illnesses are covered without any waiting period.

What are the health services allowed under PM-JAY?

The health services allowed under PM-JAY include:
Hospitalization
Daycare surgeries
Follow-up care
Newborn childcare etc.

A detailed list of the services available under the Ayushman Bharat Yojana can be seen on the official website of the scheme.

Do I need to pay a premium to get coverage under the PM-JAY scheme?

No. the eligible applicants under the PM-JAY scheme do not require to pay a premium. They can avail the benefits offered under the plan without making any payments, including cashless treatment.

What documents does a beneficiary must bring to the hospital in case of getting hospitalized?

At the time of hospitalization, the beneficiary needs to carry a ration card or Aadhaar card or any other government recognized photo identity document. 

How does the Claim Submission process work under Ayushman Bharat Yojana?

Once the patient is discharged from the hospital, he/she can initiate the claim submission process. This can be done by raising a request on the online portal along with submitting the treatment summary and other documents. The hospital submits the documents within 24 hours of discharge.

What happens if a beneficiary falls sick while traveling or when the person is out of the home district or state?

PMJAY benefits are applicable across the country. You can avail the services by simply calling the toll-free helpline number 14555.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana how to apply?

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana is a simple online process. However, kit can also be done offline by calling at the Ayushman Bharat Yojana call center number: 1800-111-565 or 14555.

The post How to apply for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana? appeared first on Paybima Blogs.

What is Mutual Fund -Types and Definition

Any conversation centered around investment options available to modern investors is bound to include some mention of mutual funds in the course of the discussion. Incredibly versatile and matching a variety of risk appetites, mutual funds are an integral part of any modern investment portfolio. Before we venture out and start investing in mutual funds, let us first understand the mutual fund’s definition and how it works.  

Visual Stories by PayBima

What is Mutual Fund?

Understanding what is a mutual fund in simple words can help the investors demystify the inner workings of this investment instrument. Managed by an Asset Management Company (AMC) which accumulates money from several investors and invests it in equity, debt, stock, or other market-linked securities is called a mutual fund. This helps the investors in getting a high return on their investment in the longer term. The funds are managed through the expert fund managers by the Asset Management Company on behalf of the investors. The assets are invested for the short term, medium, or even long term and are based on the risk appetite of the investor. This is the common understanding among investors about what is a mutual fund in India. Now that you know what is a mutual fund and how does it work, let us talk about the structure of a mutual fund.

  • Asset Management Company (AMC): An Asset Management Company or a Fund House works for the trust like an investment manager. The Fund House or AMC is responsible for regular operations. All the funds that are to be invested by the investors are taken care of by the AMC. It is the board of trustees or the sponsor that appoints the AMC once they have received approval from the Securities Exchange Board of India (SEBI).
  • Sponsor: A sponsor sets up the trust or Mutual Fund. It is the sponsor that sets up the board of trustees, the fund houses, and even the custodian.
  • Custodian: A custodian is in charge of the shares and securities that have been invested by the AMC/Fund House.
  • Board of trustees: The trustees make sure that the interest of the Mutual Fund holders is secured. They also make sure that all the rules set by the SEBI are obeyed. There are at least four independent directors on the board. The members of the Fund House and the fund managers are appointed by the board.

Types of Mutual Funds

After understanding what is meant by mutual funds we need to understand the various types of mutual funds that are available for investment. Mutual Fund in India are of various types and are differentiated based on risk, specialty, geography, etc. Here is a quick look at the various mutual fund types.

Debt Fund

Wondering what is debt mutual fund? Well, a debt mutual fund refers to debt securities being the primary investment option where 65% of the portfolio is invested. Well suited to risk-averse investors, it includes investment options such as government bonds, deposit certificates, treasury bills, etc. These instruments are free from market fluctuations. The top debt fund types are as follows:

  • Fixed Maturity Plan – Closed-ended debt fund with a Limited offer period such as government bonds
  • Liquid Fund – If you are wondering what is a liquid mutual fund, it is Investing in high-return assets and securities with 91 days or less maturity period which is suitable for surplus funds
  • Income Fund – Long-term maturity instruments with stable returns throughout the term
  • Credit Opportunity Fund – Riskiest investment instruments with high earning potential
  • Dynamic Bond Fund – Fluctuating interest rate of the instrument influences the portfolio
  • Gilt Fund – Least risky of all funds with Government securities of high ratings.

Know More: How To Withdraw Money From Mutual Funds

Equity Fund

If you are familiar with the term mutual fund and its types, you have wondered about what is equity mutual fund. An equity mutual fund is one where equity and equity-linked security makes up for above 65% of the portfolio. They are characterized by a high risk-high reward and are perfect for investors who have a large risk appetite. The returns of these funds depend on the performance of the money market and therefore may fluctuate. Some of the prominent equity mutual fund types are as follows:

  • Large Cap fund – Investment in companies from 1 to 100 of market capitalization rank as per SEBI norm
  • Mid Cap Fund – Investment in companies with market capitalization rank under 250 are covered under Mid Cap Fund
  • Small Cap Fund – Investment in companies from 251 and above market capitalization rank
  • Multi-Cap Fund – Investing in companies across all market capitalization to maximize profit according to market movements
  • Index Fund – For those who are wondering what is an index mutual fund, it is a fund where investment is linked to stock indexes such as BSE, SENSEX, NSE, and Nifty
  • ELSS – The Equity Linked Savings Scheme investment is Tax exempted up to INR 1,50,000 under Section 80C of the Income Tax Act 1961 and has a lock-in period
  • Sector Fund – Investments in industry sectors such as IT, Telecom, FMCG, Tourism, etc. are categorized under Sector Fund.

Also Know: Difference Between Unit-Linked Insurance Policy (ULIP) and Mutual Funds

There are also some questions asked about other mutual fund types such as what is an open-ended mutual fund. An open-ended mutual fund refers to a scheme that is continuously available for subscription and repurchase. Most of the mutual funds are open-ended making liquidation easy.

Another question asked about mutual fund type is what is a direct mutual fund. All mutual funds carry these two plans called Direct and Regular plans based on how they are purchased. As for what is the difference between a direct and regular mutual fund, the direct mutual fund plan is taken directly from the AMC, usually through their website. In comparison, a regular mutual fund plan is purchased through mutual fund distributors. The biggest difference is that the Total Expense Ratio or TER of the direct plan is comparatively lower resulting in a higher NAV.

Other Insurance Options

  • bajaj-allianz-general-insurance
  • chola-ms-general-insurance
  • go-digit-general-insurance
  • new-india-assurance
  • reliance-general-insurance
  • sbi-general-insurance
  • liberty-general-insurance
  • tata-aig-general-insurance
  • universal-sompo-general-insurance
  • hdfc-ergo-general-insurance
  • icici-lombard-general-insurance
  • royal-sundaram-general-insurance

 

Why you should invest in mutual funds?

After understanding what is a mutual fund and its types, it is time to learn the benefits of investing in mutual funds. Here are some of the top benefits that investors can enjoy by investing in mutual funds.

  • Liquidity – Apart from ELSS, none of the mutual fund types have a lock-in period. This means that due to the open-ended nature of the funds you easily liquidate them according to your needs.
  • Expert advice – The AMC of Asset Management Company that handles the investments in the funds has sound financial acumen and understanding of the money market. They also build the portfolio after spending time identifying potential earners over a period of time.
  • Goal-based investing – You can choose the life goals that you need to meet and start investing to meet the financial liability of these goals. You can find mutual fund schemes to match these goals.
  • Use the switch fund option – Switching funds within the same fund house is an option that is available to you as an investor.
  • Diversify your portfolio – You can avoid your investments being concentrated in a particular industry or sector so that you can mitigate the risk. Mutual funds allow you to diversify your investment portfolio to different sectors.

Which is the best mutual fund to invest in?

It is often asked what is the best mutual fund to invest in; however, there is no correct answer that applies to everyone. Investors who are looking for higher returns tend to favor equity-based mutual funds while those who have a lower risk appetite may prefer debt-based mutual funds. Investors looking to diversify their portfolio may choose different sector funds, while those seeking tax benefits may stick with ELSS funds. Ultimately it all comes down to the individual investor’s financial needs, risk appetite, and preference.

How to invest in mutual funds?

You can invest in mutual funds through both online and offline modes. In the online mode, you can visit the official web portal of the fund to contact the fund, and fulfill your e-KYC requirements to start investing. Alternatively, you can also use the official mobile app of the fund to create your account and follow the navigation steps provided to start investing.

In offline mode, you can visit the fund house branch to submit your documents and begin your investing. You can also visit a mutual fund broker who can additionally provide investment advice for a small fee so that you may take an informed decision.

Who should invest in mutual funds?

Due to the higher rate of inflation, many of the traditional forms of investing are falling short. In these situations, mutual funds present an excellent way for people from all walks of life to invest and earn returns. This includes salaried persons who can invest in SIPs to bring investment discipline into their lives or entrepreneurs and freelancers who may find lump-sum investments better suited to their needs. People with specific financial goals can also find mutual fund schemes that are designed to help them plan their finances around these goals.

When should you invest in mutual funds?

As many mutual fund investors choose to go with Systematic Investment Plans or SIP to invest, they can start at any time that they are comfortable with. The market behavior may change over the course of their investment journey; however, the fund manager would consistently direct their fund towards the most profitable options to strengthen their portfolio. Once you have identified your investment goal you should start investing at the earliest.

Conclusion

Mutual funds are an excellent investment option for modern investors as it allows the investors to benefit from the thorough research and financial acumen of expert fund managers and also adjust the investments according to their preferences. This way the investors can find options within their budget and risk appetite to make the best investment decisions.

Found this post informational?

Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.

 

View this post on Instagram

 

A post shared by paybima (@paybima)

FAQs on What is Mutual Fund -Types and Definition

What is a mutual fund?

A mutual fund is an investment instrument where funds of several investors are accumulated by an Asset Management Company or Fund Manager and then invested in a variety of investment schemes.

How does a mutual fund work?

A mutual fund uses fund managers and their team of analysts to invest the accumulated corpus of the fund in securities such as stocks, bonds, and other assets, and generate favorable financial returns. The risk of investing is mitigated as all investors share the profits and losses.

How many types of mutual funds are there?

Mutual funds are of usually three types, such as Equity, Debt, and Hybrid funds.

Why you should invest in mutual funds?

Investing in mutual funds can help investors in saving up for specific financial goals while also maintaining the liquidity of the investments. 

Other Investment Products

The post What is Mutual Fund -Types and Definition appeared first on Paybima Blogs.