Where should a first-time investor invest?

I am absolutely new to mutual funds and looking to invest, so as to make better returns than the typical FD returns. Since I am a first-time investor, seek your guidance with regards to mutual fund investments with a horizon of one to three years, with either low risk or moderate risk. Also, if you could suggest the best way to learn about mutual funds.
--Ashtamoorthy Kanjur

If you are 'absolutely new to mutual funds,’ you should consult an experienced mutual fund advisor/investment consultant in your locality before investing. The advisor/consultant will offer you a personalised investment plan to meet your various goals.

Since you are investing for a short period, you should invest in safer investment avenues like debt mutual fund schemes. Debt mutual fund schemes may offer marginally higher returns than bank deposits. They can offer better after-tax returns if you hold on to your investments for more than three years. If debt mutual fund investments are held for more than three years, they qualify for long-term capital gains tax of 20 per cent with indexation benefit.


It is very important to choose a debt mutual fund scheme based on your investment horizon. You may learn more about debt mutual funds by reading this story: Know your debt mutual fund schemes better