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Various ways to Invest online in Mutual Fund

By   /   September 23, 2013  /   1 Comment

Various ways to Invest online in Mutual Funds

Mutual fund investors are not exactly a pampered lot today. If you approach an agent for a mutual fund, he will either offer you an excuse or a Ulip/Insurance plan or both. This is the sad truth for the mutual fund industry after the scrapping of entry loads (the bread and butter for many advisers).

Even if you don’t have a dependable adviser, you can still invest in mutual funds by taking the online route. Online investing may not be very big in India but it’s a convenient option. Here are a few ways you can buy mutual funds online

 

AMC websites

Most fund companies offer their products to investors at the click of a button. Their websites offer the facility to transact in mutual funds online. This is the cheapest route for the investor because the facility comes absolutely free. However, this is not the most convenient way to invest online.

As a first time investor, you still need to physically approach the fund house or collection centres of either of the RTAs (CAMS and Karvy) to submit the application form. You first download the scheme form from the respective website, fill in your details and submit the same along with the initial cheque, photocopy of PAN card and KYC letter. You also need to apply for a personal identification number (PIN) for online transactions.

Once you are assigned a folio number along with the PIN, all subsequent transactions in the folio can be done online using your bank account. However, you need to go through the entire procedure again if you also want to invest in other fund houses. Only the KYC procedure will not have to be repeated. Remembering 6-7 different PINs for various fund houses can be a big headache.

List of MF AMC’s in India: Click

 

Broker platforms

If you have an online trading account for stocks, you can also buy mutual funds through the same channel provided the broker offers such a facility. Most large brokerages are today linked to the NSE or BSE mutual fund exchange platforms. All you have to do is log on to the broker’s online trading terminal and select the scheme of your choice from the list of schemes available on the portal (you can also place orders offline). The units will be credited directly to your demat account.

If you cannot already access the mutual fund portal, you may have to ask your broker to activate the same. Some brokers also offer online SIP facility for those who do not wish to make one-time lumpsum investments. Since every step is automated, investors do not have to step out of the comfort of their home. In addition, brokers also provide in-house research to help investors identify the best schemes and also allow a consolidated view of all their holdings.

Currently, most brokerages are providing this service free of cost; so you do not incur any transaction costs. However some charge brokerage below a threshold investment amount every time you buy or sell. This will vary from broker to broker.

 

Independent portals

There are also independent web portals like Funds India and Fund supermart that cater to mutual fund investors, allowing you to buy and sell online at no extra cost. All you have to do is create an online account (free of cost) with them, after which you can get access to the entire universe of mutual funds. The process is fairly simple. FundsIndia, for instance, asks you for the basic details along with a copy of your PAN card and a cancelled cheque of your bank account.

You can submit the duly filled in form and documents with the enclosed prepaid mailer. Note that if you are not already KYC compliant, the portal will also process and verify the necessary documents after which your account will be activated.

All you want to know about KYC: Click  

 

www.financialkundali.com

www.financialkundali.com

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About the author

Hi My name is Hari Om Tripathi. I am an engineer by chance & a Personal Financial Planner by choice. Currently residing in Kanpur & writing full time for Financial Kundali. In case you have any query about Personal Financial Planning such a buying a MF or ULIP, going for a life insurance plan or a term plan, to surrender your policy or not or any other questions related to your Personal Financial Planning, write to me at financialkundali@gmail.com

1 Comment

  1. Hari Om says:

    Recently someone asked me how safe is investment via FundsIndia. This is what FundsIndia have to say about it

    -Mutual fund transactions are made entirely in the name of the investor, and no money is retained by FundsIndia on behalf of the investor. We only facilitate the money transfer for making investments. For example, online transactions with FundsIndia are made using a payment gateway that connects investor accounts to more than 35 net-banking portals. When an investor makes an investment, the money is sent directly from the bank via the payment gateway to the mutual fund account for the investment. In the rare cases where the money transfer does not succeed fully, the amount will be refunded to your account within 2 business days

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