A few years ago people made customary trips to the banks for their regular transactions; then came the net banking. Now transactions are done with the click of a mouse, sitting at home. Convenience is of prime importance today. However, when it comes to investment, many people still do the traditional way, through an agent. Online investing is still not very big in India, but it’s a convenient option. Here are a few ways for you to buy mutual funds online:
Most fund companies offer the facility to transact in mutual funds online. 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. This is the cheapest route for the investor because the facility comes absolutely free. The flip side is remembering 6-7 different PINs for various fund houses; which can be a big headache. Some of the websites are
Most large brokers 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. The units will be credited directly to your demat account. You can do an SIP or a lump sum investment as per your wish. Charges are nominal; however they vary from broker to broker. ICICI Direct, for instance, charges Rs 30 or 1.5% (whichever is lower) of the SIP amount, for investments below Rs 8 lakh. Lump sum investments below this limit attract a flat charge of Rs 100. For those who do not have a demat account, setting one up with a broker will involve various charges such as account opening charge (Rs 250-750), annual maintenance charges (Rs 300-550). Many online brokerages also allow you to map existing MF investments with your investment account.
There are independent portals like Fundsindia and Fundsupermart; which came into existence in 2009 and have been catering to mutual funds investors to buy and sell online at no extra cost. All you have to do is open an account with them, fill up a form online, take a printout of this pre-filled online form, sign it, attach a copy of your Permanent Account Number (PAN) card and know-your-client (KYC) acknowledgement and send to them. Once this is done, you can buy MFs across 41 fund houses. These portals have tie-up with the leading banks for seamless online payments. Apart from the zero-cost advantage, these portals offer several additional benefits that provide a friendly, hassle-free experience to the investors. They also provide tools to keep track of your holdings along with in-house research and analysis to help you build the ideal portfolio.
(We recommend you to open a Mutual Fund account or transfer your existing account to FundsIndia.com. It’s a lifetime free account to help you invest in the best researched mutual funds along with several add-ons.)
Mutual funds are an effective engine to route your investments in the equity markets. They offer several advantages over direct stock picking; but even after knowing the importance of investing in mutual funds, many people refrain from this instrument for the simple reason that they find it cumbersome. Hope this article makes things easier. More on mutual funds would follow soon. Till then, happy investing! Stay Blessed!!!
About the Author:
Vandana Dubey is a Certified Financial Planner and a corporate trainer by profession. She wants to create financial awareness. She can be reached at firstname.lastname@example.org