Benefits of Investing in Mutual Funds

By Ashikur Rahman Tusar

Software Developer

EDGE AMC Limited

Posted on: 20 Dec, 2023

Last Updated: 17 August, 2026

Mutual funds offer expert fund management, tax savings, strong investor protection, and easy liquidity — all starting from as little as BDT 1,000. This set of advantages makes them one of the most accessible and reliable ways to grow your savings, regardless of which fund you choose.

Here's why they're one of the smartest ways to grow your money.

1. Access to Expert Fund Management with Little Cost

Investing in the right mutual fund gives you access to some of the best investment professionals in the country, for a fee of just 0.5–2%.

Because mutual funds pool money from many investors, you can gain exposure to expensive stocks or securities that would otherwise be out of reach with a small investment thus building a diversified portfolio at minimal cost. Tracking your investment is also simple: rather than monitoring individual stock prices, you just need to check the fund's NAV periodically.

Mutual funds also let you grow your investment steadily over time through a Systematic Investment Plan (SIP) or by investing lump sums whenever you choose. Many salaried individuals use SIPs as a disciplined, monthly savings habit. Take a look at this article to learn more about the differences between SIP and lump sum investments.

2. Tax Benefits

Mutual fund investments come with meaningful tax advantages. Capital gains not taxed for the first BDT 50 lacs and taxed at 15% on any amount above BDT 50 lacs. Investors can claim tax rebates on investments of up to BDT 75,00,000.

For more accurate rebate calculations, use our Tax Rebate Calculator.

3. Investor Protection

Mutual funds are structured to keep investors' interests protected. A fund trustee and custodian ensure that client assets are kept separate from the asset manager and that the manager acts in investors' best interest. The securities regulator adds another layer of oversight, and funds are audited annually, with portfolio and financial statements shared quarterly.

While no system is entirely free of lapses, choosing a fund managed by an ethical, reputable AMC significantly reduces this risk. To learn more about the structure of a mutual and the safeguards built into mutual funds, see this article.

4. Liquidity

Except for a few fund types and factors like pre-exit penalties, mutual fund investors can redeem their units at any time. This flexibility makes mutual funds one of the more liquid investment options available, letting you convert your holdings into cash whenever you need to.

Frequently Asked Questions About Investing in Mutual Funds

Q: How much money do I need to start investing in a mutual fund?

A: You can start with as little as BDT 1,000/month for SIP and BDT 5,000 for lump sum investments.

Q: Which mutual fund should I invest in?

A: Choosing a mutual fund depends on what you want out of your investment and how much risk you are comfortable with, among other considerations. To help you make your decision, you can read this guide on choosing the right mutual fund. You can also try the EDGE Fund Selector tool.

Q: How safe are mutual fund investments?

A: Fund trustees, custodians, and the securities regulator all provide oversight, and funds are audited yearly with quarterly reporting. To learn more about the safeguards built into mutual funds, see this article.

Q: Can I withdraw my money anytime?

A: Yes, in most cases you can redeem your units at any time, subject to any applicable pre-exit penalties for specific funds.

Q: What's the difference between a SIP and a lump sum investment?

A: A SIP involves investing smaller, fixed amounts regularly, while a lump sum is a one-time investment made whenever you choose. To learn more about the differences between a SIP and a lump sum investment, check out this article.

Search

Have Any Question?

If you have any questions feel free to reach out to us via phone or email.

Blogs