Last updated: 10 November 2026
Mutual fund investments are subject to market risks. Read all scheme related documents carefully.
Mutual funds
- Market risk: the value of equity and hybrid funds rises and falls with the stock market, and you may get back less than you invested.
- Interest rate and credit risk: debt funds can lose value when interest rates rise or when an issuer’s credit quality falls.
- Liquidity risk: some securities may be difficult to sell in stressed markets.
- NAVs can go up or down. Past performance may or may not be sustained in future. Check each scheme’s riskometer and Scheme Information Document.
Insurance
Benefits depend on the policy terms, exclusions, waiting periods and accurate disclosure at the proposal stage. Market-linked insurance plans carry investment risk borne by the policyholder.
National Pension System
NPS returns depend on the performance of the underlying equity, corporate bond and government securities. Withdrawals before or at exit are subject to PFRDA rules, including compulsory annuity purchase. Annuity rates are not known in advance.
Fixed deposits and corporate deposits
Bank deposits are insured by DICGC only up to the prescribed limit per depositor per bank. Corporate and NBFC deposits are not covered by DICGC and depend on the issuer’s ability to repay. Premature withdrawal may reduce interest.
Bonds, NCDs and capital gain bonds
These carry credit risk (the issuer may default), interest rate risk (prices fall when rates rise) and liquidity risk (it may be hard to sell before maturity). Credit ratings are opinions, not guarantees, and can change.
Sovereign gold bonds
Value is linked to the market price of gold, which can fall. Exchange-traded SGBs may trade at a premium or discount to gold prices, and trading volumes can be low.
Loans
Borrowing adds a repayment obligation. For a loan against mutual funds, the lender may sell pledged units if their value falls below the required margin.
Taxation
Tax laws and rates change. Tax benefits depend on your individual circumstances and the tax regime you choose. Please consult a tax professional.
For any questions about these risks, contact Prathmesh Financial Services at prathmeshfs@gmail.com.