Mutual funds can be categorized into two types of funds :

Active Funds

In active funds , we have an experienced fund manager and a management team to make decisions on the amount collected from investors. For example,

1. Mirae Asset Large Cap Fund - Fund Manager - Gaurav Misra & Harshad Borawake
2. Parag Parikh Long Term Equity Fund - Fund Manager - Rajeev Thakkar & Raj Mehta

Passive Funds

In passive funds, they follow a market index and do not have a fund manager who actively manages the portfolio. For example,

1. SBI ETF Nifty 50 - Largest ETF in India with an overall AUM of 75,000 crores and this fund tracks the Nifty 50 . Expense ratio is 0.07%

When we buy a house loan from bank,

1. Bank provides us money
2. We need to return the money after fixed number of years
3. Bank charges a fixed interest rate for the money that it has lent

However, we also lend money to banks. In case of a fixed deposit, we lend money to the bank.

PPF Benefits

1. Loan against PPF

1. If you take a loan against your PPF, this is 1% above the interest that you get in your PPF account. This has been reduced from 2% to 1%.

I was living in a rented house since 2005 when I moved from my parent’s house. Buying a house was quite expensive and I was unsure that I would work so long. Tenure for loans were 15-25 years. EMI’s were more expensive than the rent. I was not sure of many things while buying a house :

I was so excited! My first job. This actually would mean independence. This would also mean that I would have a bank account and there would be a number bigger than 0 in my account. However, with the uncontrolled expenses, my bank account quickly got depleted as soon as my salary came in. Thankfully maturity came and as years passed by, I started gaining different types of assets including a house, a car, few more savings account, a fixed deposit, mutual fund , stocks etc…