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 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.
It has left thousands of investors in the lurch. They don't know how or where to invest their money. But don't lose heart. 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.
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.
Source: Economic Times
Thanks and Regards,
Sanchari Sinha,
Intern at DENIP Consultants Pvt. Ltd.
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