How to buy direct mutual funds online in India?

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How to buy direct mutual funds online in India?

In this article, we will be learning how an investor can save 50% costs and invest directly in a mutual fund via using online services. Following are the topics covered in the article.

Why buy direct mutual funds?

As per the SEBI (Securities and Exchange Board of India) new rule, an investor can buy units of a mutual fund in two ways direct mode & regular mode. In the case of regular mutual funds, the expense rate is double that of direct mutual funds.

But if you do not have a detailed understanding of how the stock market & mutual funds work you are better off investing via a broker or financial planner. This article can also help you if you do not understand how to evaluate mutual funds.

AMC website

First, an investor needs to choose the company in with they want to buy the units, these companies are called AMC (full form Asset management company). 

Then create an account on particular AMC’s website, complete the KYC (know your customer) process include the following things, an investor has to provide personal detail like Pan card, Aadhar card, & bank detail like account number, bank name, IFSC code, account type & verification of this details via OTP.

Registrar And Transfer Agent (RTA)

There are two major register & transfer agents in India, they are CAMS (Computer Age management systems) & Karvy. The process of purchasing units via RTA is the same as that of AMC’s website.

These are the companies who maintain all the data relating to purchase & sell to units of a mutual fund company on behave of AMC’s. It is difficult for AMC’s to track all this data so they outsource this job to RTA.

An investor before going to the RTA website should check whether they can buy their desired fund through a particular RTA as other RTA may maintaining it.

Digital platform

These are new-age platform services where an investor can invest in any mutual fund company and their fund in one place with zero charges. This process is safe as an investor will be buying directly from the AMC’s. The process is the same as RTA for buying & selling units. These companies include Groww, Zerodha coin, Upstox, etc.

For more information on this topic go to Groww.in 

Disclaimer

I am not a SEBI registered investment advisor. This article is for information purposes any scheme or company name mentioned here is just for example & not a recommendation. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes. 

 

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