{"id":522,"date":"2026-04-18T13:21:39","date_gmt":"2026-04-18T07:51:39","guid":{"rendered":"https:\/\/prodigypro.co.in\/blog\/?p=522"},"modified":"2026-04-18T13:21:41","modified_gmt":"2026-04-18T07:51:41","slug":"chit-funds-vs-mutual-funds","status":"publish","type":"post","link":"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/","title":{"rendered":"Chit Funds vs Mutual Funds: What Should Beginners Choose?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-1024x576.webp\" alt=\"Chit Funds vs Mutual Funds\" class=\"wp-image-523\" srcset=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-1024x576.webp 1024w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-300x169.webp 300w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-768x432.webp 768w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-1536x864.webp 1536w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Portfolio-Turnover-Explained-43-2048x1152.webp 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Chit_Funds_vs_Mutual_Funds\" >Chit Funds vs Mutual Funds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Chit_Funds_vs_Mutual_Funds_Navigating_Investment_Options_for_Your_Financial_Goals\" >Chit Funds vs Mutual Funds: Navigating Investment Options for Your Financial Goals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Risk_and_Returns_A_Comparative_Analysis_of_Chit_Funds_and_Mutual_Funds\" >Risk and Returns: A Comparative Analysis of Chit Funds and Mutual Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Pooling_Wealth_Understanding_Asset_Management_through_Chit_Funds_and_Mutual_Funds\" >Pooling Wealth: Understanding Asset Management through Chit Funds and Mutual Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Flexibility_and_Liquidity_Which_Investment_Vehicle_Best_Meets_Your_Needs\" >Flexibility and Liquidity: Which Investment Vehicle Best Meets Your Needs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Returns_Consistency_and_Market_Exposure_Evaluating_Chit_Funds_and_Mutual_Funds_for_Smart_Investing\" >Returns, Consistency and Market Exposure: Evaluating Chit Funds and Mutual Funds for Smart Investing<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#On_a_parting_note%E2%80%A6\" >On a parting note\u2026<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#What_is_a_chit_fund\" >What is a chit fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#How_do_mutual_funds_work\" >How do mutual funds work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Chit_funds_or_mutual%E2%80%82funds_Which_is_riskier\" >Chit funds or mutual\u2002funds: Which is riskier?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#Which_one%E2%80%82provides_better_liquidity\" >Which one\u2002provides better liquidity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/prodigypro.co.in\/blog\/chit-funds-vs-mutual-funds\/#When_to_choose_a_chit_fund\" >When to choose a chit fund?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Chit_Funds_vs_Mutual_Funds\"><\/span>Chit Funds vs Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s say you and some of your friends want to combine your savings for other\u2002future expenses. In India, two common ways to do this for pooling money in such financial ventures include Chit Funds and\u2002Mutual Funds. Though they\u2002both involve aggregating capital together, there are significant differences in how they operate, their risk-return profiles, and regulatory structure.<\/p>\n\n\n\n<p>Acquainting yourself with these differences is an essential step towards making investment\u2002decisions that avoid either extreme and are consistent with your particular financial needs and risk tolerance. In this article, we will analyze these two\u2002investing options comparatively, so you can settle into the right financial decision.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Chit_Funds_vs_Mutual_Funds_Navigating_Investment_Options_for_Your_Financial_Goals\"><\/span>Chit Funds vs Mutual Funds: Navigating Investment Options for Your Financial Goals<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Let&#8217;s say you\u2002and a group of friends need to save money in one place for different goals.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Chit Funds:<\/strong> Just\u2002a Rotating Savings Club<\/li>\n<\/ul>\n\n\n\n<p>And you know what? A chit fund is pretty much like a small\u2002gang of dudes putting money into a common pot regularly. Then, once in a while, one member gets to take all the chips (or\u2002a big part of them). This process continues until everyone in the group has had an\u2002opportunity to grab the money.<\/p>\n\n\n\n<p><strong>Here&#8217;s a simpler breakdown:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Small Group:<\/strong> Some people\u2002you probably know.<\/li>\n\n\n\n<li>Everyone invests the same\u2002amount every time (for example, monthly).<\/li>\n\n\n\n<li><strong>Winner:<\/strong>\u2002One nautical person wins every period. The mechanism by which the \u201cwinner\u201d is selected\u2002can differ (auction, lottery, or pre-agreed order).<\/li>\n\n\n\n<li><strong>Everybody Gets a Turn:<\/strong> Everyone in the group will\u2002eventually get the lump sum.<\/li>\n<\/ul>\n\n\n\n<p>So, if 10 friends contribute \u20b91,000\u2002a month, the pot is \u20b910,000. One friend\u2002receives this \u20b910,000 each month. In 10 months, everyone\u2002will receive \u20b910,000.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Mutual Funds:<\/strong> Investing\u2002in a Basket of Various Things<\/li>\n<\/ul>\n\n\n\n<p>Consider a professional money manager who collects money from a lot of people (like you) and invests the money in different things, including stocks (company shares), bonds (loans to a company or\u2002the government) or even a variety of stocks and bonds. You wrote a small piece of\u2002this \u201cbasket\u201d of investments.<\/p>\n\n\n\n<p><strong>Here&#8217;s a simpler breakdown:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Large Group: <\/strong>A collection of\u2002many investors, both big and small.<\/li>\n\n\n\n<li><strong>Invest Money:\u2002<\/strong>These are investment decisions made by the experts.<\/li>\n\n\n\n<li><strong>Diversification:<\/strong> Your money is invested in various assets, which\u2002can help decrease risk.<\/li>\n\n\n\n<li><strong>Potential for Growth:<\/strong> Your investment\u2002value may go up or down based on the performance of the market.<\/li>\n\n\n\n<li><strong>Very Well Regulated:<\/strong> There are very stringent rules and regulations to protect\u2002the investors.<\/li>\n<\/ul>\n\n\n\n<p>So, let\u2019s say you give \u20b9500\u2002to a fund manager. They pool\u2002together your money with that of thousands of other people and buy stocks of different companies. If\u2002these companies grow well, you may be able to earn more from your \u20b9500 investment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Risk_and_Returns_A_Comparative_Analysis_of_Chit_Funds_and_Mutual_Funds\"><\/span>Risk and Returns: A Comparative Analysis of Chit Funds and Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Chit Funds: Low Risk\u2002- Low Returns<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Risk:<\/strong> Relatively low, as the returns are somewhat predictable given\u2002the auction. The primary risk is when a group member fails to repay their share\u2002(default risk).<\/li>\n\n\n\n<li><strong>Returns:<\/strong>\u2002Generally,y is less than mutual funds. When your number comes up, you receive\u2002a lump sum, but your overall financial growth could be stymied.<\/li>\n<\/ul>\n\n\n\n<p><strong>Mutual Funds: More Potential Returns but More Risk<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Risk:<\/strong>\u2002Returns are based on market performance. Certain mutual funds (such as those invested in\u2002stocks) are considered to be risky; the value of such mutual funds can fluctuate a lot (increase and decrease). This risk is\u2002managed by diversification (investing in many things).<\/li>\n\n\n\n<li><strong>Returns:<\/strong> Potentially more lucrative than chit funds, particularly\u2002for the long-term, as they put money into assets that can appreciate.<\/li>\n<\/ul>\n\n\n\n<p><strong>Simply, we can say:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Chit Fund: <\/strong>Something similar\u2002to a savings plan, but safer with a fixed payout at some point.<\/li>\n\n\n\n<li><strong>Mutual Fund: <\/strong>Similar to investing in a business \u2013 it may grow a lot, but\u2002there is also a possibility it may not be so successful.<\/li>\n<\/ul>\n\n\n\n<p>For more secure,\u2002albeit low, predictable returns, consider chit funds. If you want potentially higher returns and can\u2002stomach swings in the market, mutual funds may be a better option.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pooling_Wealth_Understanding_Asset_Management_through_Chit_Funds_and_Mutual_Funds\"><\/span>Pooling Wealth: Understanding Asset Management through Chit Funds and Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Chit funds and mutual funds are\u2002popular money pooling schemes. Chit funds are essentially small groups\u2002of people who regularly put money into a pool, with one person receiving the lump sum every period. There is &#8220;management&#8221; to speak of \u2014 but it is primitive, addressing contributions and\u2002allocation among the known group.<\/p>\n\n\n\n<p>Mutual funds are professionally managed investments that pool money from multiple investors and invest in\u2002various securities to increase the value of the fund. Management is about making decisions regarding\u2002investments with the hope of making a profit.<\/p>\n\n\n\n<p>Chit funds are akin to friends pooling in cash for a big item every\u2002month, which is equally divided. Similar to many people giving their savings to investment managers that pursue high-level\u2002growth, mutual funds are a way for people to pool their money and use a professional investor for gain.<\/p>\n\n\n\n<p>The difference is that they handle the pooled money very\u2002differently. Chit funds\u2013 they redistribute it among a group of members, and Mutual Funds\u2013 they invest it for you and grow it collectively, benefit\u2002from professional management and diversification.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Flexibility_and_Liquidity_Which_Investment_Vehicle_Best_Meets_Your_Needs\"><\/span>Flexibility and Liquidity: Which Investment Vehicle Best Meets Your Needs?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Flexibility means being able to easily change\u2002your investment, and liquidity is having the ability to turn investments into cash quickly.<\/p>\n\n\n\n<p>Chit Funds have\u2002limited flexibility. Contribution amounts and\u2002schedules are often set in stone and hard to alter. Liquidity is also poor; recovering\u2002funds early can be difficult, and you may not receive the total contributed amount. Availability of funds depends on the\u2002chits cycle.<\/p>\n\n\n\n<p>In comparison, Mutual Funds offer a greater degree\u2002of flexibility. You can usually vary\u2002how much and when you invest. Liquidity is generally pretty\u2002good; you can usually sell your units and get cash in a few days, but at market value.<\/p>\n\n\n\n<p>Chit\u2002funds are like a certain subscription; inconvenient to change or discontinue later. Mutual funds are\u2002akin to a savings account with stronger deposit and cash-out conditions.<\/p>\n\n\n\n<p>On the other hand, for those who need quick access to their funds or prefer an investment strategy that can easily be adjusted, a mutual fund is comparatively more appropriate owing to its\u2002higher liquidity and flexibility.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Returns_Consistency_and_Market_Exposure_Evaluating_Chit_Funds_and_Mutual_Funds_for_Smart_Investing\"><\/span>Returns, Consistency and Market Exposure: Evaluating Chit Funds and Mutual Funds for Smart Investing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>When we think about smart investing, we consider:<\/strong> Returns\u2002(how much profit you make); Consistency (how reliable those returns are over time); and Market exposure (how much you\u2019re tied up in the whims of the broader economy).<\/p>\n\n\n\n<p><strong>Returns: <\/strong>The returns are a bit\u2002predictable in a chit fund. Your\u2002discount is essentially your \u201creturn\u201d if you bid for the pot. If you get it later, the return is minimal (you\u2019re mostly just getting\u2002back your own saved money).<\/p>\n\n\n\n<p><strong>Lack of Consistency:<\/strong> Unlike the way market-linked investments can grow, returns\u2002are not consistent. You get a lump sum once. Depending upon when they receive the pot and\u2002how much they might have bid, the \u201creturn\u201d for each member varies.<\/p>\n\n\n\n<p><strong>Market Exposure:<\/strong> Chit funds are largely\u2002immune to the impact of broader stock market and economic fluctuations. Your returns\u2002aren\u2019t directly dependent on how well companies do or on interest rates changing.<\/p>\n\n\n\n<p>The nature of returns\u2002is somewhat inconsistent; it can be steady (especially in the long term), but the market exposure is high.<\/p>\n\n\n\n<p><strong>Returns:<\/strong> Returns for mutual funds vary depending\u2002on how well the assets they hold (like stocks or bonds) do. Some funds seek steady long-term\u2002returns, but short-term ups and downs are routine.<\/p>\n\n\n\n<p><strong>Consistency:<\/strong> The consistency varies from mutual fund to\u2002mutual fund and with the market conditions. While some debt funds could give relatively stable returns, equity\u2002funds can be quite volatile. Investing for the long term in funds from which you are well diversified leads to more incremental\u2002growth.<\/p>\n\n\n\n<p><strong>Market Risk \u2014 Especially Circuit Breakers:<\/strong> Mutual funds, in particular, equity and\u2002debt funds, are impacted directly by market movements. Their returns are determined\u2002primarily by economic growth, company earnings and interest rate movements.<\/p>\n\n\n\n<p>Chit funds\u2002provide predictable but usually modest, one-off returns that are largely unrelated to the market. Mutual funds have the opportunity for greater but variable returns based on market performance, long-term strategies aim\u2002for consistency.<\/p>\n\n\n\n<p><strong>Also, Check &#8211; <a href=\"https:\/\/prodigypro.co.in\/blog\/what-is-an-interval-fund\/\">What is an Interval Fund<\/a><\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"On_a_parting_note%E2%80%A6\"><\/span>On a parting note\u2026<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Chit\u2002funds and mutual funds are methods of pooling money, but pay attention to the different needs. Chit funds provide a\u2002simple, community-based method for saving and borrowing with predictable, though relatively low, yields. Their\u2002main risk is that fellow members are unreliable, and they have low flexibility and\/or liquidity. They are ideal for people who\u2002want a more structured savings plan inside a trusted network.<\/p>\n\n\n\n<p>On the other\u2002hand, mutual funds provide professionally managed and varied investment options that have the promise of higher returns, though just like all market-linked investments, higher risk. They enable the investment\u2002of smaller amounts and are more liquid. Mutual funds are suitable for investors with a slightly higher risk appetite, focused on wealth creation for the\u2002long term, and who may want liquidity.<\/p>\n\n\n\n<p>The decision must be tailored to your\u2002situation: seek safety and assuredness at the community level with chit funds with returns. Choose mutual funds if you want the potential for more growth, appreciate professional management, and can weather\u2002market ups and downs.<\/p>\n\n\n\n<p>Please share your thoughts on this post by leaving a reply in the comments section. Contact us via phone,\u00a0<a href=\"http:\/\/wa.me\/917347700888\" target=\"_blank\" rel=\"noreferrer noopener\">WhatsApp<\/a>, or email to learn more about mutual funds, or visit our\u00a0<a href=\"https:\/\/bfccapital.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">website<\/a>. Alternatively, you can download the\u00a0<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.bfc_mf.prodigy_app&amp;pcampaignid=web_share\" target=\"_blank\" rel=\"noreferrer noopener\">Prodigy Pro<\/a>\u00a0app to start investing today!<\/p>\n\n\n<div ><style>#sp-ea-521 .spcollapsing { height: 0; overflow: hidden; transition-property: height;transition-duration: 300ms;}#sp-ea-521.sp-easy-accordion>.sp-ea-single {margin-bottom: 10px; border: 1px solid #e2e2e2; }#sp-ea-521.sp-easy-accordion>.sp-ea-single>.ea-header a {color: #ffffff;}#sp-ea-521.sp-easy-accordion>.sp-ea-single>.sp-collapse>.ea-body {background: #fff; color: #444;}#sp-ea-521.sp-easy-accordion>.sp-ea-single {background: #7c8cff;}#sp-ea-521.sp-easy-accordion>.sp-ea-single>.ea-header a .ea-expand-icon { float: left; color: #444;font-size: 16px;}<\/style><div id=\"sp_easy_accordion-1776489350\"><div id=\"sp-ea-521\" class=\"sp-ea-one sp-easy-accordion\" data-ea-active=\"ea-click\" data-ea-mode=\"vertical\" data-preloader=\"\" data-scroll-active-item=\"\" data-offset-to-scroll=\"0\"><div class=\"ea-card ea-expand sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_is_a_chit_fund\"><\/span><a class=\"collapsed\" id=\"ea-header-5210\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse5210\" aria-controls=\"collapse5210\" href=\"#\" aria-expanded=\"true\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-minus\"><\/i> What is a chit fund?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse collapsed show\" id=\"collapse5210\" data-parent=\"#sp-ea-521\" role=\"region\" aria-labelledby=\"ea-header-5210\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">A community savings scheme where members\u2002deposit at regular intervals, and someone gets a lump sum at regular intervals.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"How_do_mutual_funds_work\"><\/span><a class=\"collapsed\" id=\"ea-header-5211\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse5211\" aria-controls=\"collapse5211\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> How do mutual funds work?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse5211\" data-parent=\"#sp-ea-521\" role=\"region\" aria-labelledby=\"ea-header-5211\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Think of it as professional investors\u2002collecting money from investors to invest that money into a variety of different investment types that grow.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"Chit_funds_or_mutual%E2%80%82funds_Which_is_riskier\"><\/span><a class=\"collapsed\" id=\"ea-header-5212\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse5212\" aria-controls=\"collapse5212\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> Chit funds or mutual\u2002funds: Which is riskier?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse5212\" data-parent=\"#sp-ea-521\" role=\"region\" aria-labelledby=\"ea-header-5212\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Market fluctuations make mutual funds expensive; default risk calls for chit funds. On a larger scale, market fluctuations\u2002will consistently raise the price of an investment made.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"Which_one%E2%80%82provides_better_liquidity\"><\/span><a class=\"collapsed\" id=\"ea-header-5213\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse5213\" aria-controls=\"collapse5213\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> Which one\u2002provides better liquidity?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse5213\" data-parent=\"#sp-ea-521\" role=\"region\" aria-labelledby=\"ea-header-5213\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Mutual funds\u2002generally provide superior liquidity, which makes it less difficult to convert to cash.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"When_to_choose_a_chit_fund\"><\/span><a class=\"collapsed\" id=\"ea-header-5214\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse5214\" aria-controls=\"collapse5214\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> When to choose a chit fund?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse5214\" data-parent=\"#sp-ea-521\" role=\"region\" aria-labelledby=\"ea-header-5214\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Choose a chit fund when you need a disciplined savings plan with the potential for immediate liquidity.<\/span><\/p><\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n<p><strong>Disclaimer: <\/strong>This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chit Funds vs Mutual Funds Let\u2019s say you and some of your friends want to combine your savings for other\u2002future expenses. In India, two common ways to..<\/p>\n","protected":false},"author":1,"featured_media":523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[765,768,766,769,158,665,767],"class_list":["post-522","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-chit-fund-meaning","tag-chit-fund-vs-mf-comparison","tag-chit-funds-vs-mutual-funds","tag-difference-between-chit-funds-and-mutual-funds","tag-investment-options-for-beginners","tag-mutual-fund-basics","tag-mutual-funds-for-beginners"],"_links":{"self":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/comments?post=522"}],"version-history":[{"count":1,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/522\/revisions"}],"predecessor-version":[{"id":524,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/522\/revisions\/524"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/media\/523"}],"wp:attachment":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/media?parent=522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/categories?post=522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/tags?post=522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}