Posted On Wednesday, Sep 21, 2022
Mutual Funds have gained immense popularity over the past decade due to the variety of options they offer to cater to the needs of every individual.
But do you know how to go about investing in mutual funds?
The process of investing in mutual funds has become simple and convenient in the past few years. Once you have shortlisted the scheme you want to invest in, you can invest either offline or online:
a) Offline mode
You can invest in mutual funds offline by visiting the nearest branch of a mutual fund house or through a mutual fund distributor. You will be required to submit a duly filled application form along with other relevant documents such as proof of identity, proof of address, and cancelled cheque leaf. Then proceed to pay the required investment amount and complete the transaction.
b) Online mode
If you want to avoid the hassle of visiting a mutual fund office or the mutual fund distributor, you can choose to invest in mutual funds online from the comfort of your home, office, or anywhere else.
Here are the different ways in which you can invest in mutual funds online...
1) Invest in mutual funds online directly with the mutual fund house
You can buy mutual fund units online directly from the respective websites or official apps of different mutual fund houses. If you are a first-time investor, you need to complete the KYC process before you can start investing.
Once the KYC process is complete, you can proceed to invest in the scheme of your choice (equity, debt, etc.) by following the below process:
• Open a new account with the mutual fund house by providing relevant personal details – name, address, contact number, e-mail ID, etc.
• Fill in the required mandatory investment details such as…
- The scheme name of your choice
- Select the plan type (Direct) and option (Growth or Dividend)
- Mode of investment – lump sum or SIP, etc.
- Enter the amount you wish to invest and frequency (monthly, quarterly, etc. in case of SIP)
• Provide bank account details through which you will be transacting and mode of payment -- net banking, debit card, etc.
• Verify and complete the transaction
2) Invest in mutual funds online directly through a Stock Broker Account
You can transact in mutual funds online using your existing Demat account. Just log in to your Broking account and look for the option to invest in mutual funds. Then proceed to select the scheme you want to invest in. Thereafter, enter the investment amount, verify and complete the transaction. The mutual fund units will be credited directly to your Demat account once the process is complete. Do note that once you hold mutual funds in Demat form, all transactions (including stopping or redeeming investment) can be done only through the Broking account.
Investing in mutual funds using the Demat account allows you to invest and track all your mutual funds, equities, and bonds in one place. However, do note that you need to bear demat charges, such as annual maintenance charges, etc.
3) Invest in mutual funds online directly through investment platforms
In this day and age of fintech, there are various investment platforms available nowadays facilitating you to invest in mutual funds online in an easy and hassle-free way. These mutual fund investment platforms offer single-point access to help you with comparing funds as well as investing and tracking your transactions with different mutual fund houses.
To invest in mutual funds online through an investment platform you need to complete the following steps:
• Creating an account with the respective mutual fund investment platform
• Fill in your personal details.
• Selecting the scheme of your choice (you can also select multiple schemes)
• Choose the mode of investment (SIP or lump sum) and the amount
• Make the payment to complete the investment
Direct Plan Vs Regular Plan
Every mutual fund scheme is mandated to offer two plans -- Direct and Regular. As the name suggests, Direct Plans allow you to invest in mutual funds directly without any middleman (distributor, agents, etc.). The expense ratio of the Direct Plan is usually lower than that of the Regular Plan since mutual fund houses do not have to pay commissions to distributors. You can invest in Direct Plans of mutual funds online.
The lower expense ratio results in higher NAV for investors in the Direct Plan.
That said, opt for the Direct Plan only if you have the time and knowledge to select and invest in the most suitable mutual fund schemes on your own. If you do not possess the skills or the knowledge, it is advisable to seek the services of a SEBI-registered investment adviser.
Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
Mutual fund investments are subject to market risks read all scheme related documents carefully.
Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.
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