Mutual Funds: How to Invest in online? Beginners Guide-2020.
Mutual funds are very sophisticated products and for the first time investor, it is very common to be very worried. However, if you have a basic understanding of how mutual funds work, you can easily start your investment journey.
What is Mutual Fund?
Mutual Fund is an investment scheme that saves from many investors under a special scheme managed by an asset management company (AMC). Then the money deposited is invested in bonds or equity shares as per the investment objective the particular scheme. The fund manager appointed by AMC manages investment portfolios according to market movements to make money for investors. Fund houses take an annual fee called annual ratio from investors to manage their portfolio. Investors usually make money through regular dividends/interest and capital appreciation. They can choose to reorganize capital gains through development options or earn regular income through dividend options.
Step by Step Guide for Online Investment.
Online investing is simple, fast and convenient. Although most mutual funds allow you to invest online, the actual experience is alive on various investment portals. They allow you to buy, sell, and monitor online investments. A permanent account number (PAN) is the biggest requirement. Here’s a way to invest in online mutual funds.
Documents Need for Start Investment
To start investing in Mutual Funds, you have to comply with PAN (mandatory), bank account and KYC (Know your customer). The bank account investor should have the Magnetic Ink Character Recognition (MICR) and the Indian Financial System Code (IFSC) with details. These details are outlined on every check leaf and it is common for an agent or distributor to look for the canceled bank check leaf.
Get KYC compliance
It is mandatory to conform to your Know-Your-customer (KYC) norms. Fund houses, along with many portals, allowing you to make your KYC online, if you are not already doing KYC-compliance.
Existing Investors and those who have submitted their applications can check the status of KYC compliance with their PAN number with the KYC Registration Agency.
The KYC process is favourable to the investor and the securities market is very similar in various SEBI regulated intermediaries such as Mutual Funds, Portfolio Manager, Depository Participants, Stock Brokers, Venture Capital Funds, Collective Investment Schemes and others. In this way, a single KYC eliminates the duplication of KYC process in these intermediaries and makes more investor-friendly investments.
The following documents are required as Id & Address Proof:
- ID proof that includes any one of the following:
- PAN card
- Driving license
- Voter ID card
- Aadhaar Card
- Address proof, which can be any of the following:
- Telephone bill
- Electricity bill
- Ration card
- Aadhaar Card
It allows you to invest up to only 50,000 per fund house per year. To make more investment, you need to complete physical KYC (arrangement for taking forms through multiple portals courier) or a biometric KYC. You need to verify your bank account and register your bank mandate. Different bank accounts and portals have different systems. You can register your bank mandate using the base-based online verification process as used for KYC.
All plans offer direct and regular plans. Direct Plan Do not come with Distributor Commission. It is also mandatory for the registered investment advisers to offer a direct plan to charge the fee. If you are investing through a portal, check cost structure. Portals like mutual funds utility, which maintains the MF industry jointly, allows distributors to route their transactions as well as allow direct investors to invest. There are portals that provide you direct plans but charge a nominal fee per transaction; Some of them also offer advisory services at extra costs. Others offer only distributor plans, but then they usually offer a bundle of services.
Online Portals for Mutual Funds
There are many third party online portals, from where you can invest in various mutual fund schemes in AMC. Most portals have tie-ups with banks for facilitating easy fund transfer at the time of investment. These ports charge an initial fee for setting up an account and provide online access to cash in on future investments. You can visit direct the Fund House website and find the registration link for the new account. It is usually located below the login button. This will direct you in a simple form to create an online transaction account with the fund house.
Here Some Link for online Registrations
- HDFC Mutual Fund
- SBI Mutual Fund
- UTI Mutual Fund
- ICICI PRUDENTIAL MUTUAL FUND
Conclusion: These are some steps to start invest through online. After clicking the above registration link follow the instructions. If you are moderate to high-risk taker, you can consider investing in these mutual fund schemes for a minimum of 5 to 10 years time frame you may get a good return.
Thanks for reading till the end. If you enjoyed reading this article do not forget to like share and comment. This article is only for information propose. We advise you to read all scheme related documents before taking any investment decisions. Till the next time stay healthy and wealthy also stay tuned to bzlifestyle.com .