What is the minimum investment needed for investing in a Mutual Fund?

Investing wisely is crucial for achieving long-term financial goals and securing a prosperous future. When considering investing in Mutual Funds, one crucial factor to understand is the concept of minimum investment. The minimum investment is the smallest amount of money required to start investing in a Mutual Fund.

Understanding this minimum requirement is essential for investors, as it determines the initial capital needed to enter the fund and can impact investment planning and strategy. In this post let us look at the

What is the Minimum Investment Requirements?

The type of Mutual Fund determines the minimum investment required in India. For lump-sum investments, SEBI requires a minimum of Rs. 100, and for SIPs, Rs. 500. Some Mutual Funds, nevertheless, could have greater minimum requirements. Prior to beginning your investing adventure, always review the fund's criteria.

How Does Minimum Investment Work?

The smallest sum of money required to begin investing in a Mutual Fund is known as the minimum investment. Depending on the fund, this sum might start as little as Rs. 100 in India. Fund managers may screen serious investors and manage funds more effectively by requiring higher minimum investments. Additionally, they reduce the burden of managing an excessive number of minor accounts. However, funds that have smaller minimum investments make it simpler for new investors to get started. Make sure the fund meets your goals and budget by always reviewing its criteria.

Understanding Mutual Fund types and Minimum Investment Amount

Mutual Funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds and other securities. These funds are managed by professional Fund Managers, who make investment decisions based on the fund's objectives and market conditions. The different types of Mutual Funds offered are:

1. Equity Mutual Funds:

Equity Mutual Funds primarily invest in stocks or equity-related instruments of companies across different sectors and market capitalisations. These funds aim to provide long-term capital appreciation by using the growth potential of the equity markets. You can start investing in equity Mutual Funds with a minimum amount as low as ₹100, depending on the specific fund and scheme.

2. Debt Mutual Funds:

Debt Mutual Funds primarily invest in fixed-income securities such as government bonds, corporate bonds, money market instruments and other debt securities. These funds aim to provide stable returns while preserving capital. The minimum investment for debt Mutual Funds usually begins at ₹100, based on the chosen fund and scheme.

3. Hybrid Mutual Funds:

Hybrid Mutual Funds, also known as balanced funds, invest in a mix of equity and debt instruments, providing a balanced investment approach. These funds aim to offer capital appreciation along with income generation while managing the risk through asset allocation. Usually, Hybrid mutual funds allow you to start with a minimum investment of ₹100, depending on the specific fund and scheme.

For Systematic Investments Plans (SIPs), the minimum investment typically ranges from ₹500 to ₹1,000, while for one-time investments, the amount varies from ₹100 to ₹5,000.

Examples of Minimum Investment

1.Aditya Birla Sun Life Digital India Fund

This fund focuses on businesses that stand to gain from the expansion of India's digital economy and has a minimum investment of Rs. 1,000.

2. HDFC Small Cap Fund

This fund needs a minimum of Rs. 5,000 investment. It focuses on small-cap companies which carry a higher risk but also the potential for larger profits.

3. Mirae Asset Tax Saver Fund

With this tax-saving fund, you can achieve long-term capital appreciation through a diversified equities portfolio with a minimum investment of Rs. 500.

4. SBI Bluechip Fund

It is a large-cap fund which invests in reputable blue-chip firms with a minimum contribution of Rs. 5,000.

5. Axis Long-Term Equity Fund

This focuses on tax savings and requires a minimum investment of Rs. 500.

What determines the minimum investment requirement for Mutual Funds?

The following factors determine the minimum investment requirement for Mutual Funds:

• Type of Mutual Fund: Different types of Mutual Funds may have varying minimum investment requirements. For instance, equity funds may have a different threshold compared to debt funds or hybrid funds.

• Risk Profile: The risk profile of the Mutual Fund scheme can influence the minimum investment requirement. Funds with higher risk profiles may have a higher minimum investment threshold.

• Regulatory Guidelines: Regulatory authorities such as SEBI may prescribe certain minimum investment norms that financial institutions need to adhere to.

• Fund Objectives: The investment objectives of the Mutual Fund scheme play a crucial role in determining the minimum investment requirement. Funds with specific investment objectives may have different minimum investment thresholds.

How to invest in Mutual Funds through ICICI Bank?

Investing in Mutual Funds through ICICI Bank is a streamlined process designed to provide convenience and accessibility to investors. Whether you prefer online platforms or seek personalised assistance, ICICI Bank offers multiple channels to facilitate Mutual Fund investments. Here are the steps to invest in Mutual Funds through ICICI Bank:

Through Net Banking

• Go to your Net Banking account and invest in Mutual Funds through ICICI Bank.

• On the 'Investments and Insurance' page, choose 'Buy Mutual Funds.'

• Look through the different schemes, select your favourite, and filter based on your preferences. You can also determine the potential returns and plan your investment strategy, whether through SIP or Lump Sum investment methods, using the Mutual Fund Calculator to guide your decisions.

• Click 'Invest Now,' type in the amount, then select 'Lump Sum or SIP'.

• Examine the information and be sure to finish the investment.

Through Mobile App

• Get the iMobile app from the app store, then enter your login information.

• Click 'Invest' tab and then click 'Mutual Funds.'

• Look over the available schemes, verify information such as performance and NAV, and select the one you wish to invest in.

• Enter the sum, choose a lump sum or SIP, check the information, and validate your investment.

Assisted Channels:

Customers can also visit any ICICI Bank Branch or call 1800 1080 for assistance with Mutual Fund investments. Use a Mutual Fund calculator or SIP calculator to estimate the returns you can potentially earn from your investments.