Investing in direct mutual funds is a great way to grow your wealth. Unlike regular plans, direct mutual funds have lower expense ratios, meaning more money is invested. Whether investing online or offline, it’s important to understand the process and the benefits.
How to Invest in Direct Mutual Funds Online
Investing in direct mutual funds online is easy and convenient. Follow these steps:
Choose a Mutual Fund Platform
First, you need to choose a reliable mutual fund platform. Then, sign up by adding your basic details, such as your name, email address, and mobile number.
After signing up, create your account by following the platform’s instructions. This involves setting up a secure password and verifying your email address or phone number.
Complete Your KYC
Next, you must complete your KYC (Know Your Customer) process, which is mandatory for all mutual fund investments. Most platforms allow you to complete this process online. You must upload essential documents such as your PAN card, Aadhaar card, and a passport-size photograph.
Some platforms may require a scanned copy of your bank account statement or a cancelled cheque. The KYC process ensures that your identity and address are verified, which is crucial for secure transactions.
Select the Mutual Fund
Once your KYC is complete, you can start browsing various mutual fund schemes available on the platform. Take your time to research and compare different funds based on their past performance, risk level, and investment goals.
After selecting a mutual fund that matches your investment objectives, click the ‘Invest’ button. Enter the amount you wish to invest, and choose whether to make a lump sum investment or start a SIP (Systematic Investment Plan).
Make Payment
You must pay after selecting your mutual fund and entering the investment amount. Most platforms offer multiple payment methods, including net banking, UPI, debit cards, and more. Choose the most convenient payment method.
Double-check all the details before making the transaction. Once you confirm the payment, the amount will be debited from your bank account, and your investment will be processed. Once the transaction is complete, you will receive a confirmation email or message, and you can track your investment through the platform’s dashboard.
Advantages of Investing in Direct Mutual Funds Online
Investing in direct mutual funds online has many benefits:
Lower Expense Ratio
Compared to regular plans, direct mutual funds have lower expense ratios. This means you pay less in fees, allowing you to keep more of your money invested and working for you.
Higher Returns
Because direct mutual funds have lower expenses, they typically offer higher returns over time. More of your money stays invested, helping it grow faster.
Easy to Track and Manage
Online platforms provide simple tools and dashboards that make tracking and managing your investments easy. You can see how your money is performing and make adjustments whenever needed.
Convenience
Investing online is very convenient. You can invest any time, from anywhere, without the need to visit a physical branch. This saves you time and effort, making the investment process smoother.
Documents Required for Investing in Direct Mutual Funds Plans
Before you start investing in direct mutual funds, make sure you have the following documents ready:
- PAN Card: This is necessary for tax purposes and to verify your identity.
- Aadhaar Card: This serves as proof of your identity and address.
- Passport-size Photograph: A recent photo is required for your KYC application.
- Bank Account Details: To link your bank account to your mutual fund investments, you will need your bank account number, IFSC code, and branch details.
- Cancelled Cheque: This provides your bank account details and helps verify your account for secure transactions.
How to Invest in Mutual Funds Offline
If you prefer investing offline, follow these steps:
Visit the Mutual Fund House
First, you need to visit the nearest branch of the mutual fund house or find an authorised agent. These branches are usually located in major cities and towns, and their addresses are on the mutual fund company’s website. If you are not sure where to go, you can call the mutual fund company and ask for the nearest location.
Fill Out the Application Form
Once you are at the branch, you must fill out the mutual fund investment form. The form requires essential details like your name, address, and contact information. Additionally, you must submit your PAN card and Aadhaar card for identification purposes.
Additionally, attach a cancelled cheque to the form. The cancelled cheque is used to verify your bank account details.
Submit Documents
After filling out the form and attach the documents, submit them to the branch staff. They will check the documents to make sure everything is in order.
Once they accept your documents, they will give you an acknowledgement receipt. This receipt confirms that your application has been received and is being processed.
Make Payment
The final step is to pay for your mutual fund investment. You can do this by writing a cheque or getting a demand draft from your bank. Make sure the amount matches the investment you mentioned in your form.
Once you hand over the cheque or demand draft, request a payment receipt. This receipt proves that you have made the payment and will be useful for your records.
Conclusion
Investing in direct mutual funds, whether online or offline, is a great way to build your financial future. By choosing direct plans, you save on fees and potentially earn higher returns. Ensure you have the necessary documents and follow the outlined steps to start your investment journey. Begin today and watch your money grow.
FAQs
Ans: Yes, you can buy direct mutual funds through a demat account. Many platforms offer the option to hold mutual fund units in your demat account, providing convenience and integration with your other investments.
Ans: You should choose direct mutual funds over regular ones primarily because of lower expense ratios. Direct plans do not involve intermediaries, so they have lower fees compared to regular plans. This means higher returns for you over the long term.
Ans: Most platforms do not charge any fees for investing in direct mutual funds online. Unlike regular plans, where distributors may charge commissions, direct plans are typically fee-free or have minimal transaction charges.
Ans: Yes, Investing in mutual funds online is safe when you choose a trusted platform. Make sure the platform is approved by SEBI and prioritizes strong security measures to safeguard your personal and financial details.
Ans: Yes, you can easily track your investments online. Most mutual fund platforms provide a dashboard where you can monitor your investments’ performance in real time. You can view your portfolio, track returns, and make adjustments as needed, all from the convenience of your computer or mobile device. Tracking your investments regularly helps you stay informed about their progress and make informed decisions about your financial goals.
