A Deep Dive Into the Various Benefits of the Mid Cap Funds

Don’t you want to invest in a scheme which can help you to reach your investment goals while maintaining a balance between growth and value? If yes, then there is a way which can lead you towards your financial target efficiently. Mid cap category of mutual funds justifies the requirements of the investors who desire to walk on the path of wealth creation while maintaining both value and growth. Therefore, it stands among the best choices of the investors. However, the sub-categories make differences in the choices due to the varying nature of the investments and portfolio holdings. So, before you invest in any mid-cap fund, you must have an adequate understanding about them.

What Are Mid Cap Funds?

The schemes which invest in the stocks of the companies having the market capitalisation ranging from Rs. 500 crore to Rs. 10,000 crore are termed as mid cap fund. Generally, the investors of these funds need to stretch the investment duration for a longer period as compared to the large-cap ones due to the nature of the companies. They are known for the benefits they provide from the excellent combination of the returns and capital appreciation. As the mid-cap companies are those which already have traveled through the phase of a start-up and heading toward the way to become a large company, they provide benefits of both the small-cap and the large-cap funds.

When comparing the small-caps with the mid-cap category, the latter one get least affected by the market volatility because they have strong presence. Moreover, the mid-caps enjoy more growth opportunities than that of the large-cap peers as the latter one are well established and grown up and have less ways to stretch its versatility.

Some Major Benefits of the Mid-Cap Mutual Funds:

• They adopts the innovations and changes in the market faster as they are adequately diversified in their products or services and specialised in their niche. 
• Mostly, the mid-cap stocks tend to beat the performance of the other two categories in terms of growth and value in the long run.
• For the investors who are ready to stay invested for a longer investment tenure, this category serves the best benefits of big returns. 

There are several more advantages of deploying the hard-earned money in the schemes of mid-cap space. You too can reap them by investing in the most suitable one. We, at MySIPonline, have plenty of the best performing mid-cap mutual funds. If you want to fetch the excellent benefits of investing in them, then visit us right away and start on a good way toward the achievement of your financial dreams.

Do you want to save tax while investing?

All of us aspire to get something extra within the same price that we pay for a single good. This is a common human tendency which makes us choosy and we search for avenues which can provide maximum satisfaction to our needs according to the money spend for them. But, when it comes to tax planning, we follow the advice of a tax-planner blindly or go by mouth publicity, which is a wrong practice. Investing along with tax saving is a difficult task for all the clients and needs to be taken care of very efficiently. Thus, to resolve the turmoil mutual fund experts have launched a scheme which allows the clients to save their taxes and at the same time enjoy capital appreciation within a single scheme. The scheme is known as ELSS (Equity Linked Saving Scheme). It allows the clients to access a scheme which abides by all the rules defined under the Section 80C of the Income Tax Act.

Understanding ELSS in a better way

Tax saving is an intricate task for the clients who fall into a higher tax bracket. They are confused about the investment mechanisms which will allow them to save tax and provide higher returns on their savings. The general tax saving mechanisms known to people are PPF and NSC. Both these schemes are government sponsored and gives a rate of interest to the clients. These are similar to having a bank account but differ a little bit. But, with two restrictions, namely, restriction on withdrawal and a minimum amount to be deposited every year. On the contrary, mutual funds have launched ELSS with a view to embracing twin benefits to the clients. ELSS allows the clients to invest in mutual funds and avail the benefits of tax saving. ELSS fund enables the client to invest a sum of Rs. 1.5 Lac, which is the permissible tax rebate limit. This means that the clients can invest Rs. 1.5 Lac from the total taxable income of the clients.

How tax rebate is applicable?

ELSS is a scheme defined under the Section 80C of the Income Tax Act. As per this Section, the clients have the right to save tax up to Rs. 1.5 Lac if their annual income exceeds Rs. 2.5 Lac. The clients are free to invest either the entire amount in ELSS scheme or they can diversify their investments between different tax saving options. For example, a client’s annual income is Rs. 5 Lac. The limit on which a client need not pay taxes according to the tax slab is Rs. 2.5 Lac. Tax is chargeable on the remaining Rs. 2.5 Lac. From this sum the client can save extra Rs. 1.5 Lac, so he will have to pay tax on the remaining 1 Lac which will be less as compared to the tax that has to be paid on Rs. 2.5 Lac. The client will benefit the most if he invests the entire amount in the ELSS fund, as it will provide him with better benefits as compared to any other scheme. All government sponsored schemes provide a rate of interest as low as 8% while ELSS scheme provides a return rate of 15%. Along with having a lock-in period of three years ELSS scheme has been rated as one of the tax savers which has a less lock-in period as compared to any other plan.

Thus, investing in mutual funds will not only save your tax but will also enable you to create a corpus for your future needs on the whole. So, if your income falls under the taxable slab then you can surely opt for ELSS scheme. You can also take up the online ELSS investment through My SIP online which will allow you to monitor your funds and investment in a simple manner.