What makes Mutual Funds an excellent investment option for young investors?

Your early twenties is a phase when you are just a year or two old in your career and slowly beginning to understand the importance of savings and investment. Hence, many youngsters like you are eager to have financial freedom and are looking for ways to use their money smartly. The agenda is to make money work for you and thereby increase your savings and earnings.

Mutual Funds are often the most sought-after option. A simple investment vehicle, mutual fund schemes allow amateur investors to choose among different varieties to create wealth. Besides, looking at the current market trend, mutual funds are one of the best investment routes for young and new investors. Since there is no one-size-fits-all rule when it comes to investment strategies, the earlier you start, the better you’ll learn to manage money. 

Let’s discuss why Mutual Funds will prove to be a beneficial investment option for young investors like you: 


Investors in their 20’s are only novices in their careers. Hence you may not have enough knowledge and expertise to make large-cap investments. Having said this, it is not that young people are incapable of handling complex financial decisions. Still, Mutual Funds are an easy-to-understand investment vehicle even for those who are starting with the ABC of savings. Because of easy access and fairly comprehensive terms, mutual funds are the best choice for first-time investors. 


Mutual Funds hold plenty of securities, like stocks and bonds, under its purview to enable an investor to diversify their investment risk. As a young investor, not only can you enhance your financial portfolio by investing in more than one fund, but you can also lower the risk of your overall investment. In case of an unpleasant economic event, dividing your savings into something as low as even one or two funds will defend your money against a financial crisis. And if the value of your stock falls and the value of your bonds rises, it offsets losses that could otherwise wipe out an entire portfolio in financially tumultuous situations. Since Mutual Funds have a broad market exposure, they are the most advisable investment option for young investors. 


When you begin your investment journey, you neither have the money nor the financial skills to take risks. But there are quite a few investment options under mutual funds that require very little money and can be bought without the help of a broker. As a beginner, you can easily open an account within minutes with HDFC Bank via InstaAccount and begin your investment journey with HDFC Bank Mutual Funds. You can create a portfolio with options that best meet your investment goals. Choose between wealth creation, children’s fund, and retirement planning to meet long term goals, while tax-saving and regular income is best to meet short-term requirements. 

With HDFC Bank, you can opt for Equity Funds, Debt Funds or SIP (Systematic Investment Plans). Or by opening an Investment Services Account, you can easily carry out transactions and have complete control over your Mutual Funds via NetBanking.  

Tax Saving 

Before blindly investing in a Mutual Fund, learn about your fund. Every category has its own risks and rewards that will help you decide whether or not it meets your saving goals. For instance, as a young investor who is just starting out in the professional space, tax-saving investments are a sensible choice. If the mutual fund you are investing in is an ELSS fund, you will reap tax benefits under section 80C. ELSS funds have a lock-in period of 3 years and are ideal to meet short-term goals. These investments offer the dual advantage of tax saving and better returns than traditional investment tools. 

Bottom Line 

Mutual Funds are a smart investment choice for all those are ready to go beyond Fixed Deposits and Recurring Deposits to increase their savings. Relatively simple to understand, Mutual Funds are a safe investment option because SEBI regulates it. However, mutual fund schemes are subject to market risk so always read the documents thoroughly before making a decision. 

To start investing in Mutual Funds, click here now!

* Terms and Conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.