Mutual Funds in India are financial instruments. A mutual fund is not an alternative investment option to stocks and bonds; rather it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities. The owner of a mutual fund unit gets a proportional share of the fund’s gains, losses, income and expenses. Mutual Fund is vehicle for investment in stocks and Bonds. Each mutual fund has a specific stated objective. The fund’s objective is laid out in the fund's prospectus, which is the legal document that contains information about the fund, its history, its officers and its performance. There has been growing importance of Mutual Fund Investment in India. When compared with other financial instruments, investments in Mutual funds are safer and also yields more returns on the portfolio investment. The focus of the study is to explore the factors that are responsible in increasing the Mutual Fund investment in India. The study also helps to understand the role of demographics in Mutual funds in India. This enables the fund managers to understand investment pattern and preferences of investor’s behind investing in Mutual Funds. Further analysis of the study reveals that financial literacy of respondents is very important for making investment in Mutual funds.