Mutual Fund Schemes for Students 2025

Mutual funds are designed to grow and increase your wealth. Depending on how much money you invest, the returns are likely to make to smile in the long run. The best part of investing in mutual funds as a student is that you don't even need to get a job and earn money to make investments. A part of your allowance or pocket money can be set aside each month and the same can be invested in mutual funds through Systematic investment Plans.

Benefits of Making Investments in Mutual Funds as a Student

Here are the main benefits of making investments in mutual funds as a student:

1. Meeting Your Financial Objectives
   1. If you have financial goals that you need to meet in the long run, investing in mutual funds from a young age will give you a head-start.
   2. The effort involved in investing in mutual funds is minimal, and over a period of time, your investments will pay off and help you achieve your targets. You will also learn a lot about how to invest when you start working, thereby helping you increase wealth to a significant extent as you age.
2. TimeTime is one of the greatest assets of youngsters.
   1. It is also the most crucial thing when it comes to investing. Basically, your investment will grow at a compounding rate over a period of time, and this means that the profit generated by your investment will generate profits of its own.
   2. The sooner you start investing, the better you will be disciplined for your latter years.
3. Healthy Investment Habits
   1. It is not easy to cultivate healthy investment habits. It takes time to plan your expenses, set aside funds for investment, and maintain the pattern consistently.
   2. However, cultivating these habits can be of great importance in your latter years.
   3. When you are still studying, if you try to save, say, Rs.500 per month, you will have accrued more than Rs.30,000 by the time you finish 3-4 years of college (assuming your investment grows at 15% per annum). Therefore, cultivating these habits at a young age is crucial to a healthy financial future.

Does it Really Benefit to Make Investments as a Student?

The power of compounding cannot be taken for granted. The more you delay, the more you risk losing out on the same.

Let's consider a situation, for instance. If you start making investments in mutual funds during your very first month of college, even if the amount is as low as Rs.100 per week considering you are a student with limited financial resources.

In a year, this amount adds up to Rs.5,200, which translates to Rs.433 per month. This is just the amount you have managed to save. Interest will be earned on this amount, and let's say the returns accrued through your investment are 7% per year.

Basically, if you invest Rs.433 per month for a period of three years (36 months), you would have invested Rs.15,588 during your college years. Adding the rate of returns, you will have Rs.17,873 by the time you finish college, and would have earned a profit of Rs.2,285 in three years with an amount as low as Rs.100 per week.

Now, if you continue to invest the same Rs.100 per week until you turn 60 years of age and retire from professional life, your investment would have grown to Rs.15,88,669 (assuming the rate of returns is 7%). Investing in mutual funds from a very young age is clearly a good practice, and if you have even Rs.100 to spare each week, mutual funds will help that amount grow in a few years.

Mutual Funds to Meet Long-Term Financial Goals

If you have long-term goals and you require finances after four years or so, here are some mutual funds that can help you achieve your targets:

1. Axis Bluechip Fund
   1. The Axis Bluechip Fund was first made available to investors in January 2010 and has since offered returns of 12.99%. The risk profile of the fund is moderate, and its portfolio comprises 85% equity.
   2. Investments under the scheme are made mainly in technology, automotive, and banking sectors. The Axis Bluechip Fund is regarded as a highly profitable scheme for students because apart from providing healthy annualised returns, it also offers market exposure.
   3. The 1-year returns recorded by the scheme stand at 21.50%, the 3-year returns are 17.00%, and the 5-year returns are recorded at 21.00%.
2. SBI Bluechip Fund
   1. The SBI Bluechip Fund aims to offer capital growth in the long-term by making investments in large-cap equity instruments. The fund is managed actively and the element of diversification helps the fund generate returns over a period of time.
   2. The SBI Bluechip Fund was launched in January 2006 and has provided investors with returns of 11.68% since. The risk level associated with the scheme is moderately high, and the fund's portfolio consists of stocks mainly from the automobile and banking sectors, and partly from the oil and gas, pharmaceutical, and other sectors.
   3. More than 90% of the corpus of the SBI Bluechip Fund is invested in large-cap equity stocks. Investments under the scheme are made in some of the top companies that are less volatile in comparison with smaller companies, thereby making their returns more stable.
   4. The 1-year returns recorded by the scheme stand at 10.50%, with the 3-year returns standing at 14.50%, and the 5-year returns being recorded at a whopping 23.20%.

Mutual Fund Schemes to Meet Mid-term Financial Goals

1. ICICI Prudential Equity and Debt Fund
   1. The ICICI Prudential Equity and Debt Fund makes investments mainly in money market and debt securities. The scheme was launched in November 1999, delivering returns of 14.72% since.
   2. The ICICI Prudential Equity and Debt Fund is considered as a good investment option for students due to the combination of equity and debt instruments in its portfolio.
   3. The 1-year returns offered by the scheme are recorded at 11.01%, the 3-year returns are recorded at 15.50%, and the 5-year returns stand at 21.90%.
2. Principal Hybrid Equity Fund
   1. The investment objective of the Principal Hybrid Equity Fund is to generate capital growth in the long term through investment in equities.
   2. Having been launched in January 2000, the Principal Hybrid Equity Fund has offered 11.75% returns since.
   3. The risk profile of the fund is moderately high but it is known for its consistent performance in addition to delivering high returns. Two-thirds of the portfolio of the Principal Hybrid Equity Fund is invested in equity markets, with the banking sector dominating the corpus of the fund.
   4. This scheme is ideal for students due to the consistent returns it offers. The 1-year returns offered by the scheme are 14.20%, the 3-year returns are recorded at 18.60%, and the 5-year returns stand at 22.00%.

Mutual Fund Scheme to Meet Short-term Financial Goals

The Franklin India Low Duration Fund is the best option for students who wish to invest in mutual funds for the short term. It is a debt fund that allows investors to remain invested for just a few weeks if that is what they prefer.

The risk profile of the scheme is relatively low and it has delivered returns of 9.63% since it was launched. Two-thirds of the corpus of the scheme is invested in debt instruments while the remainder is put into cash. Students will find this scheme beneficial in the short term due to how safe it is to invest in it. The 1-year returns offered by the scheme stand at 7.60%, the 3-year returns stand at 9.20%, and the 5-year returns are 9.80%.

Investment in mutual funds is as simple as it gets. You need to do some research regarding the documents you will require to get started and you're good to go. Once you invest, it is important to keep track of their performances from time to time.