If you have adequate knowledge about a mutual fund product or have taken the guidance of a good advisor, you can directly invest in mutual funds, sidestepping intermediaries. What you save in the form of costs, you gain in returns over the long term. Here are a few ways you can invest directly in funds. Before doing so, remember that first-time MF investors are required to complete their Know Your Customer (KYC) formalities.
Fund house
Each mutual fund house has its own website or mobile app from where you can buy their respective schemes. The process may slightly vary across fund houses. Typically, once your KYC is complete, you need to register for an account with the fund house by filling out your personal details.
Once you have selected the fund to invest in, you can select the ‘Direct Plan’ and make the payment. The downside here is that you will need to remember multiple login credentials in case you choose to buy different funds belonging to different asset management companies (AMCs).
You can overcome this by using platforms such as MF Utilities (MFU) or by transacting through a registrar.
MF Utilities
MFU is a shared services initiative by the MF industry. On the platform, a customer can transact in multiple schemes across fund houses in a single window and make a single payment. Through the eCAN facility (tinyurl.com/MFUCAN), eligible investors can submit self-attested data and electronically open a Common Account Number (CAN).
The eCAN will be activated in one business, after which you will be able to transact. Once you log in, add the mutual fund schemes to your cart, much like online shopping, and then pay using a convenient mode.. You can also use the MFU mobile app — goMF.
Registrar
Mutual fund registrars such as CAMS and KFintech also facilitate online investing in mutual funds. However, you must note that the investment options will be limited to the mutual funds registered with each registrar.
About 16 fund houses are registered with CAMS and nearly two dozen with KFintech. You can visit their websites/apps to invest. Franklin Templeton Mutual Fund operates through its own registrar.
Other modes
Platforms such as Paytm Money, Groww and Kuvera enable investing in direct mutual fund plans at no cost to the investor. You can invest in funds that are available on the respective platforms. For example, Kuvera says it offers funds from 39 fund houses.
These platforms are better than the ones provided by MF registrars, who only sell the funds theyservice.However, not all online platforms offer direct plans.
For instance, many banks offer an option to invest in MF schemes on their internet banking portals. Financial intermediaries, including banks, are essentially mutual fund distributors, and hence cannot sell you direct plans on their web portals. The same is the case with intermediaries/brokers who provide online platforms for investments.
These days mutual funds can also be bought through WhatsApp and SMS facilities, if you are an existing customer of a fund house. Usually, one can perform lump-sum and SIP transactions through WhatsApp. If you are not an existing customer, you can access generic information and FAQs on WhatsApp.
SMSes are to be sent in pre-defined formats from registered numbers to the AMC-specific SMS number to execute a transaction.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.