Mutual funds pool money from many investors and invest across securities according to a stated objective, managed by a professional fund house.
Core idea
Instead of buying individual stocks or bonds yourself, you buy units of a fund. Returns depend on the underlying portfolio and market conditions, minus fees such as expense ratios.
SIP vs lump sum
You can invest in mutual funds through a monthly SIP or a one-time lump sum. SIPs help average purchase cost over time; lump sums invest capital immediately.