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Meanwhile, if you’re looking for some best alternative, then, of course, you should head to Equity Savings Mutual Fund. Know more about this mutual fund, right over here.

These days, at any moment when two persons talk about their investment plan, they often point to the stock market. The reason is very obvious. 

The huge returns potential from stock market draw their attention. People want to fuel their financial needs for the future. 

No wonder investment in the stock market, mainly in the equities, is the best way to go with.  

The boom that the equity market has recorded over the last 10 years has grown to be highly gainful for many smart investors. 

These investors took a right decision on the right time and invested in the equities. Still, due to some reasons, many people step back from investing in the equity market. 

People think that’s risky, though it’s an eternal fallacy among them that equity market is faint-hearted. 

It’s risky; hence only investors holding a decent knowledge about a company and market enter in it.

About Equity Saving Mutual Funds

Equity Savings Fund is undoubtedly a new variant of mutual funds for many of us.

Equity Savings Mutual FundPeople who anticipate investing in equities but they don’t as it’s highly risky, no wonder, will find equity saving mutual funds a way better option.

These funds are growing popular as they split the collected fund amount between multiple asset classes. 

For example- debt funds, equity funds and arbitrage. In this way, the managers of these funds balance a portfolio by reducing the stock’s volatility impact. 

Though, these funds’ overall investment pattern is somewhat similar to the balanced funds with a slight difference. In these funds, you get extra advantage of arbitrage funds. 

However, this scheme predominantly invests 30% to 35% of its total fund amount in the equities. Similarly, the rest fund amount is invested in other instruments, e.g., debt and arbitrage funds. 

In this way, these funds split their invested amount and get a maximized return out of it. The investor who invests in these funds can expect a higher return at minimal risk. 

That’s how equity saving mutual funds prove to be a great option. 

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    Purpose of Equity Savings Fund

    Equity Savings Mutual Funds invest in multiple assets, and that’s how it serves many gainful purposes. Such as, equity fund in this scheme ensures the growth of the portfolio.

    However, the debt and arbitrage fund in the equity mutual fund scheme works as a cushion to neutralize the market volatility impact.  

    Let’s understand through an example. Suppose X investors invest in Equity saving scheme for a time horizon of 6 months. 

    After three months, investment value drops by 10% due to some reasons.

    But the manager of these schemes will be able to adjust the risk and return ratio if the debt investment generates up to 6% returns p.a. 

    Similarly, if the arbitrage fund proves to be profitable with 6.5% returns, the loss can be minimized. 

    Find details of other Types of Funds here

    Should you Invest in Equity Savings Mutual Funds?

    Here, comes the most critical question. Should you invest in Equity Saving Mutual Funds? Of course yes. 

    But, before taking a dip into it, let’s understand the things you’ll have to consent about before investing in Equity Saving Mutual Funds.  

    Those investors who want to capture higher return at a minimal risk level should invest in these funds. But, it isn’t the whole truth that you’ll get the same returns similar to equities’ return. 

    These funds focus more on protecting the portfolio from turning to a negative position. 

    Meanwhile the scheme can also earn you regular income like of dividend. That’s why if you anticipate a big jackpot from these funds, forget about it.  

    This is probably an excellent choice for risk-averse investors, but if returns-cravings are high, you should think about any other option. 

    Similarly, for a short-term goal, these mutual funds prove to be highly gainful.

    If you want to park your money at the safest option for the next 24 months, this scheme may live up to your expectations.  

    But before this, you should remember again; these funds don’t believe in pure equity holdings. That’s why often you can earn relatively fewer returns. 

    Benefits of Investing in Equity Savings Mutual Funds

    Here are the list of advantages of investing in Equity Savings Fund –


    A very basic thing that helps any mutual fund plan stand out is diversification. By the mean of this rule, investors invest in multiple assets classes instead of one.

     It put off the losses and welcomes returns while balancing off the portfolio. Equity saving funds follow the same rule.

    That’s why investors discover the flexibility of investing in multiple assets through a single channel.  These funds completely wipe out the need for analyzing the market individually by any investors.

    From a list of Equity Savings Mutual Funds, you can pick out the best option that meets your goals, and you’re ready to go. 

    The manager of these funds will handle everything for you to derive higher returns from the investments, and you relax on your couch and wait for profits. 

    Make sure that your goal should be above 12 months; else you may invite 1% exit charges on early redemption. 

    Lower Volatility

    These funds can withstand pretty well in a highly volatile market as these funds invest in the equities in a limited amount. 

    Only 30%-35% of these funds comprise of equity component and rest debt and arbitrage components. It makes the overall portfolio less prone to market volatility effects. 

    Usually, here fund managers’ strategy also plays a critical role. These fund managers actively manage the overall portfolio to make it highly gainful. 


    Even though these funds consist of multiple instruments within their portfolio, still, these funds are taxed as equity assets. 

    This is mainly because the maximum portion of these funds comprises equity components that are meant to amplify the returns from the investment.

    Owing to this little thing, these funds are taxed as equity assets. But make sure you don’t redeem the funds before 12 months, else you may be taxed at the rate of 15%.

    So make sure you’ve set a goal of holding your investment for more than a year. 

    Added Advantage of Equity Savings Fund

    Usually, Mutual Funds invest predominantly in debt and equities component only.

    But you can view it as an added advantage of investment in Equity Savings Mutual Funds, as a few portions of these funds invest in arbitrage. 

    Expert investors can get more than their expectation from these funds.

    Under arbitrage funds, investors purchase stocks at the cheapest price point and try to sell it at a higher price point either within the same market or another market. 

    Find details of all types of Debt Funds here

    Things to consider before Investing an Equity Savings Fund

    Now, it’s the most critical step to follow. Often investors make a wrong selection that later put them into a big loss. 

    So you don’t repeat the mistakes that later prove to be a worse decision, consider these few valuable points before investing in Equity Saving Mutual Fund scheme-

    Risk involved

    People enter in Equity Saving Fund just because of minimal risk ratio that they offer to the investors. 

    The risk should be fairly minimal as compared to other investment plans. Though, many times you might see a few schemes with relatively higher risk ratio. 

    In such cases, you can also ignore this critical point. It is possible that the manager behind these funds is utilizing his smart and effective strategies.  

    Returns Offered

    In most instances, the performance of the instruments within a portfolio can go down. It can drastically affect the Net Asset Value of these funds. 

    So make sure you’re already aware of this usual thing, as you can’t consider any investment the safest investment. 

    Investment Horizon

    If you are ready to park your money in the safest investment plan for between 1 to 5 years, head to Equity Saving Mutual Fund scheme. 

    But make sure you don’t redeem the funds before 12 months. Otherwise, it may invite loss, as the added tax and further fees will reduce the final margin. 


    After finding the best investment plan, the next biggest concern is taxation. Equity Savings Mutual Funds are taxed as equity assets. 

    It’s due to the huge proportion of equities that these Equity Savings Mutual Funds hold. Though, as said before, if you are investing in these funds, you’ll have to wait for a year. 

    Meanwhile, if you redeem your funds before the committed time frame, higher tax is applied.  

    How to Invest in Equity Saving Mutual Funds?

    If you’re also willing to invest in Equity Savings Mutual Fund, you can proceed with the following options.

    Online Mode – You can search on the internet about the best online trading platform. 

    Select a reliable platform and see whether they provide Equity Saving Mutual Fund scheme or not. Fill the required information and start investing.  

    Offline Mode – It is a traditional way to start an investment. Search a nearby branch, fund house offering this scheme. 

    Fill out the physical form as mandated by them. You can also find a reliable broker to initiate investment in these funds on your behalf. 

    Check out all types of Hybrid Funds here

    Equity Savings Fund – Conclusion

    So should I invest? Of course, you should invest in Equity Savings Fund. Though, these funds don’t promise you a higher return for all time.

    But often it becomes possible as arbitrage fund is an added advantage you get on investing in this scheme. Owing to this, many times, you can unexpectedly invite a higher return. 

    Meanwhile, if the market isn’t doing well, the returns from funds appear similar to debt returns. However, it can also prove to be a shortcoming because these funds are taxed as pure equity assets. 

    Invest in Mutual Funds Now!!! – Fill up the Form

      Fill Your Details Here
      1. Invest in Mutual FundOpen Demat Account

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