1) Most important is to check your age and ability to take risk
The most important thing while investing in a mutual fund India is to check your age and ability to take risk. If you are in the 30s, you might want to take a risk by investing in equity mutual funds. On the other hand if you are in the 50s, you might want to invest in debt dedicated mutual funds, which can offer almost certain returns without your capital being eroded.
2) Use a mutual fund calculator
If you know the finer intricacies of Mutual Fund and how they work, use a mutual fund calculator that could be helpful, especially in calculating yields, returns etc.
3) Exit load
Each time you invest in a mutual fund scheme, there is a possibility that you would like to sell the same. When you sell the same, there is an exit load that is levied, which is nothing, but the charges that would be applicable to you. Not all top mutual fund schemes charge an exit load. So, look out for ones that do not, though never at the expense of a quality of a mutual fund scheme.
4) Asset allocation
Some schemes invest in debt, while others invest in equity. If you like taking a risk go for equities, otherwise just buy a fund that puts all its money in corporate bonds, bank deposits, certificates of deposits or government securities.
5) Track record for best performing mutual fund
Take a look at the track record of the fund. If the fund has not performed well in the past, then you might want to avoid the scheme altogether. Though past track record is no indicator of future performance.
6) Size of the mutual fund corpus
The larger the mutual fund corpus the better it is. This is because there are certain fixed costs, which will be spreader over the larger corpus and thus help to reduce costs.
7) Fund house
A fund house that has a solid expertise will help, because they have better expertise. There are as many as 35 fund houses at the moment that offer mutual fund schemes. There are some foreign fund including Fidelity Mutual Funds and Invesco, which you may want to choose from.
8) Look for the type of mutual fund scheme you need like including ELSS and money market mutual funds
Look for the type of mutual fund and then choose your own requirement. For example, if you have to invest in a scheme with Sec80 C benefits, than buy that scheme. On the other hand if you are looking for an almost certain return after a few months look for an FMP. Your investment depends on your own need and objective.