Definition of Mutual Fund
Mutual fund is that fund which is created by professional investors. Money of this fund is collected from public. Then, this money is invested in share market, bond market or money market. These professional investors are very expert in dealing in shares and bonds. Almost all banks have mutual fund and public can buy or sell the shares of mutual fund like any other shares of companies. A mutual fund gives return on given investment, but it is not given under fixed rate like interest income on debentures or loan.
To invest in mutual fund is more useful for small individual investors who do not understand the stock market analysis and they earn higher earning than deposit their money in fixed deposit schemes. Its history is connected with USA mutual funds and in India; this system of investment was started by UTI. But after passing of time, large number of banks and private professional investors made mutual funds. These days more than 22 mutual funds which are provided by companies in India.Following video will be useful for understanding mutual fund.