India has been a money minded economy since a long time. Various investment options have come and gone by giving various benefits to the users. The market has been unstable as the investment options keeps on changing day in and day out, this creates insecurity in the mind of small investors. To protect such investor’s mutual funds were brought about in the market. These types of funds help small investors to come together and create a pool of money where in they can invest according to their financial status. This fund encourages the small investors hence making the capital flow in the financial market. This paper focuses on the growth and development of mutual funds over the period of time and how it has changed the perception among the people about investment.