Frequently Asked Questions

Mutual Funds & Investing

Investing can feel complex. This FAQ section answers the most common questions about mutual funds, investing, and taxation in India, in a simple yet precise manner.

1) Mutual Funds — Core Concepts

What is a mutual fund?

A mutual fund is a professionally managed investment vehicle that pools money from multiple investors and invests it in a diversified portfolio of securities such as equities, bonds, and money market instruments.

Mutual funds in India are regulated by SEBI, ensuring transparency, investor protection, and standardized disclosures.

Simply put, mutual funds allow investors to benefit from professional management and diversification without needing deep market expertise.

What are the main types of mutual funds?

Mutual funds are broadly classified into three categories:

1. Equity Mutual Funds
These funds invest primarily in stocks of listed companies. They are suitable for long-term wealth creation and come with higher volatility.

2. Debt Mutual Funds
These funds invest in fixed-income instruments such as government securities, corporate bonds, and treasury bills. They are generally more stable and suitable for conservative investors.

3. Hybrid Mutual Funds
These funds invest in a mix of equity and debt. They aim to balance growth and stability and are suitable for investors seeking moderate risk.

Each category has multiple sub-types based on market capitalization, sectors, maturity profile, and investment strategy.

What are the key advantages of mutual funds?

Professional Management

Your investments are managed by experienced fund managers and research teams.

Diversification

Mutual funds spread investments across multiple securities, reducing risk compared to direct stock investing.

Flexibility

You can invest via SIP or lump sum and redeem your investments as per your needs.

Accessibility

You can start investing with relatively small amounts, making mutual funds suitable for most investors.

Tax Efficiency

Equity mutual funds offer favorable tax treatment compared to many traditional instruments.

Transparency and Regulation

SEBI regulations ensure disclosures, audits, and investor protection.

Because of these advantages, mutual funds are among the most effective instruments for long-term financial goals such as retirement, children’s education, and wealth creation.

Who can invest in mutual funds?

The following entities can invest in mutual funds in India:

  • Resident Indians
  • Non-Resident Indians (NRIs)
  • Persons of Indian Origin (PIOs)
  • Hindu Undivided Families (HUFs)
  • Corporates and institutions

All investors must complete KYC before investing.

What are the prerequisites for investing in mutual funds?

To invest in mutual funds, you need:

  • PAN card
  • Bank account in your name
  • Completed KYC

KYC is a one-time process and is valid across all mutual fund platforms and intermediaries.

How can I complete KYC?

You need to provide:

  • Identity proof (PAN card)
  • Address proof (passport, driving license, bank statement, Aadhaar, etc.)

KYC can be completed online or offline, depending on eligibility.

Can KYC be done online?

Yes. Resident investors with Aadhaar-linked mobile numbers can complete e-KYC online in a paperless manner.

Can I invest in mutual funds for a minor?

Yes. A parent or legal guardian can invest on behalf of a minor.

Once the minor turns 18, the account must be converted into a major account after completing the required formalities. Taxation on minor investments is usually clubbed with the guardian’s income, subject to applicable rules.

What are SIP and STP?

SIP (Systematic Investment Plan)

SIP is a disciplined method of investing a fixed amount at regular intervals (monthly, weekly, etc.).

It reduces market timing risk and encourages long-term investing.

STP (Systematic Transfer Plan)

STP allows you to gradually transfer money from one mutual fund (usually debt) to another (usually equity).

It is useful when investing a large lump sum into equity in a phased manner.

2) Investing with Keep Investing

What is Keep Investing?

Keep Investing is an AMFI-registered mutual fund distributor. We help investors build, manage, and optimize mutual fund portfolios aligned with their financial goals, risk profile, and time horizon.

Our approach goes beyond product selection—we focus on long-term investment discipline and strategic asset allocation.

What is the process to invest through Keep Investing?

The process is simple and fully online:

1

KYC Verification

We verify whether your KYC is completed and help you complete it if required.

2

Investor Onboarding

We collect essential details such as PAN, bank account, address, nominee details, and contact information.

3

Start Investing

Once onboarding is completed, you can begin investing in mutual funds.

The onboarding process typically takes 1–2 working days.

Can I track my investments online?

Yes. You receive secure login credentials to view your portfolio through our platform and mobile app at any time. You can monitor investments, transactions, and performance in real time.

Can I invest or redeem funds myself?

Yes. You can execute purchases and redemptions online. However, we recommend aligning major investment decisions with your long-term financial plan rather than reacting to short-term market movements.

How is Keep Investing different from other platforms?

Most platforms focus only on execution. Keep Investing focuses on strategy and investor behavior.

We help you:

  • Invest systematically rather than emotionally
  • Increase your savings and investment rate
  • Stay invested during market volatility
  • Align investments with long-term financial goals

Our objective is not just to help you invest—but to help you build sustainable wealth.

How do I choose the right mutual fund?

Choosing the right fund depends on three key factors:

Time Horizon

  • < 3 years → Debt
  • 3–5 years → Hybrid
  • > 5 years → Equity

Risk Appetite

Your comfort with market fluctuations determines the equity exposure suitable for you.

Financial Goals

Different goals require different strategies. A structured asset allocation is key.

3) Taxation of Mutual Funds in India (Updated)

How are equity mutual funds taxed?

Short-Term Capital Gains (STCG)

Sold within 12 months

20% tax

(plus surcharge and cess)

Long-Term Capital Gains (LTCG)

Held for > 12 months

  • Gains up to ₹1.25 lakh/yr: Exempt
  • Gains above ₹1.25 lakh: 12.5% tax

(without indexation)

These rates apply to equity-oriented mutual funds where Securities Transaction Tax (STT) is paid.

How are debt mutual funds taxed?

For investments made after 1 April 2023:

All capital gains are taxed as per your applicable income tax slab rate, regardless of holding period.

For investments made before 1 April 2023:

Long-term gains (holding period > 3 years) were taxed at 20% with indexation benefits.

Is there TDS on mutual fund investments?

Resident Indians: No TDS

NRIs: TDS is applicable as per tax rules. NRIs can claim a refund by filing an income tax return in India.

4) Investing Philosophy — The Keep Investing Approach

Is market timing important?

Successful investing is less about timing the market and more about staying invested. Systematic investing over long periods helps reduce risk and improve outcomes.

How much should I invest?

A practical guideline is to invest 20–40% of your income and gradually increase this rate as your income grows. Consistency matters more than perfection.

Why is long-term investing crucial?

Wealth creation depends on:

  • How much you invest
  • How consistently you invest
  • How long you stay invested

Long-term compounding can significantly multiply wealth.