Should I shift some funds from bank account to mutual funds

It is a good idea to transfer some investible surplus from your bank account to mutual funds. But whether it will be profitable or not will depend upon your investment objective, investment horizon and risk appetite.

For example – If you want to earn better than savings bank account then you can invest in liquid funds even for as short a horizon as 3-6 months. But if you want to invest for say 3 years, then investing in long term debt funds will make more sense. For a higher investment horizon, investing in balanced funds will be the best choice given your moderate risk profile.

Therefore based on your requirement you can always get an appropriate fund to invest in mutual funds. As far as returns are concerned, though it is never assured in mutual fund, you can get better than bank savings and FDs provided you have chosen the right funds for the appropriate tenure.

Thanks for writing to Advisorkhoj.