What is the difference between an Open-ended and Close-ended mutual fund scheme?

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Mutual funds in India are differentiated based on their investment structure and the flexibility and ease with which they can be bought and sold. 

Characteristics	Open-Ended	Close-Ended
Investment	Units of open-ended schemes can be bought and sold at any time.  The NAV changes daily based on fluctuations in the price of the underlying securities.	Units of close-ended funds can only be bought during a specific period, and sold at maturity. They are also traded on the stock exchanges to enable exiting before maturity.
No. of Units	These funds do not limit when and how many units can be purchased by an investor. Investors can enter/exit at any time at the prevailing NAV.	These funds have a fixed number of units that are issued during the New Fund Offering (NFO), which is similar to an IPO.
Liquidity	They are highly liquid.	To facilitate liquidity and allow investors to exit before maturity, these schemes are traded on the stock exchanges (NSE, BSE).