|Ownership rights||Investors have no ownership rights.||Investors do have ownership rights and can take decisions.|
|Investment amount||The minimum investment amount is Rs 100 and there is no maximum amount limit.||The minimum investment amount starts from Rs 30 and there is no maximum limit.|
|Trading time span||Mutual funds are traded once in a day.||Stocks are traded throughout the day.|
|Risk||Comparatively less risky than stocks.||Comparatively riskier than stocks.|
|Costs||Annual Management fees are required in case of mutual funds.||Brokerage fees are required in case of stocks.|
|Diversification||A mutual fund portfolio usually has a combination of various stocks, bonds, commodities and cash. Hence, by nature Mutual Funds are diverse.||The stock of a company does not have diversifying features.|
|Management||Mutual funds are managed by professional fund managers. Therefore, it does not require continuous monitoring by the investor.||Stocks are managed by their own investors. Therefore, it requires continuous monitoring.|
|DEMAT Account||There is no need for a DEMAT account.||DEMAT account is needed.|
|Value||Net Asset Value (NAV) is the value.||The price per share is the value.|
|Stock selection||Investors do not have control on picking and holding of stocks.||Investors have more control on stock selection and investment.|
|Liquidity||High and can be redeemed on the same day.||It requires a minimum time period of 3 days.|
Mutual Funds Vs Stocks- Which Is Better for You ?There are several factors that you must consider before investing in any of the two investment avenues. The most important factor is age. In terms of risk exposure, then Mutual funds do offer a redundancy and growth due to diversification. Stocks, on the other hand, are relatively riskier and offer high returns on investment.
From the point of view of control, investing in stocks allows maximum freedom. Mutual funds are managed by professional fund managers. If saving taxes is your area of concern, then investing in long term stocks is preferable. Mutual funds, on the other hand, are taxable. You will have to pay capital gain taxes irrespective of whether the market is plummeting or rising.
Explore Various Mutual Funds here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
How to save on gift tax in India?
You need to pay taxes on gifts which exceed the limits set by the Government. However, gifts of any amount received or given from relatives including parents and spouse are tax-free.
6 Factors for Rising Health Insurance Premiums
While the demand for health insurance policies has certainly increased, there has also been a rise in the premium costs. Read this post to know the top factors that lead to an increase in the premiums of health insurance.
What Is FTSE And Why Does It Matter?
Informally referred to as the ‘footsie’, FTSE is a joint venture between the London Stock Exchange and the Financial Times of London. The acronym stands for Financial Times and Stock Exchange, and the indices of this joint venture comprise UK’s most highly-capitalized companies that are listed on the London Stock Exchange.
5 Types of Business Loan For Woman Entrepreneurs
There are now many different types of loans options in India for women wanting to explore their entrepreneurial dreams. Read this post to know 5 of the most popular options.