Mutual fund in India are governed by SEBI (Securities Exchange Board of India)
Tax free return
According to current income-tax rules dividends received from mutual funds are tax free as compared to a Bank Recurring Deposit, where interest is taxable. Investment in SIP's will generate tax-free return. Also, when you get lump sum amount, you do not have to pay any tax as long-term capital gains from Mutual Funds are tax-free as per current tax rules.
Anytime withdrawal allowed
Any time withdrawal of part, full amount allowed. Although growth of your capital is possible only if you invest regularly every month and for long time.
Transparency
Quarterly statement will be sent to you by the mutual funds on demand showing you as to where your money is invested.
Your total control
It is your money, hence please keep on monitoring the performance of the mutual funds in which you have made investment.
You can withdraw, reduce or increase your invested amount, shift from one scheme to another scheme of any mutual fund, close it and re-open new account, if desired
Advantages of compounding and Power of Rupee Cost averaging
Your investment will enjoy benefit of compounding of return and rupee-cost-averaging ie; if the equity market goes up, your investment will buy you lesser units and if the market goes down, it will buy you more units. It reduces the average cost of your units.