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. Indian mutual fund has gained a lot of popularity from the past few years. Earlier only UTI enjoyed the monopoly in this industry but with the passage of time many new players entered the market, due to which the UTI monopoly breaks down and the industry faces a severe competition. As the time passes this industry has become a buzz word in the Indian financial system. So it is very important to know the investors’ perception about this industry. This study is done to determine the preferences of investors for investment in mutual funds in India. The objectives of the study were to identify the factors that influence the preferences of investors for investment in mutual fund, to analyze investment options other than mutual funds and to plan the promotion of mutual fund investment in India. The sample were divided into two i.e. Prospective and Existing investors. The study reveals the most preferred factor for investment in mutual fund by the existing investors is high return and tax benefits. Bank is the main factor which influences their investment decision as the preferred distribution channel for investment.