Open-ended Funds: Open-ended funds are always open to investment and redemptions. Open ended funds are the most common form of investment in Mutual funds in India. These funds do not have any lock-in period or maturities and are therefore open perennially. In open ended funds, the NAV is calculated daily on the value of the underlying securities at the end of the day. These funds are usually not traded on stock exchanges.

Close-ended Funds: A closed ended Mutual fund scheme is where your investment gets locked in for a specified period of time. You can subscribe to close-ended schemes only during the new fund offer period (NFO) and redeem the units only after the lock-in period or the tenure of the scheme is over. The stock price of a closed-end fund fluctuates according to market conditions, such as demand and supply, as well as the changing values of the securities in the holdings.