Learn How to Invest in Mutual Funds Online

Author: Shashank Pawar

In today’s digital age, people are buying everything online be it something as big as a car or a small thing such as soap or books. However, in terms of investment people mainly go with an offline option. But with advancement in technology, online investment has become much easier. In this article, we will put light on how to buy mutual funds online.

Ways to invest in mutual funds online

  • Online investment through AMC website You can easily do online investment through a mutual fund or say asset management companies (AMC) websites which offer the facility to transact in mutual funds online.

    • This facility is completely free. Firstly, plan the scheme which you want to opt for and download the form of that particular scheme from the website of the mutual fund company. Next, you have to add your personal details like name, father’s name, mother’s name. You will also have to submit the initial cheque, Know Your Customer (KYC) letter and photocopy of the PAN Card along with the form. In case of KYC registered, you just have to fill up the application form, otherwise, first, you have to be KYC registered. Additionally, you also need to apply for the personal identification number (PIN) to carry online investment. Next, you are assigned a folio number along with the PIN, through which you can perform online transactions using your bank account. While filling up the application form you need to opt for the direct option wherein you need to add the biller in net banking option. This will lead to automatic deduction of amount every month from your account. The same procedure will be followed to do online investment via other fund houses.

  • Online investment through Demat Account or Broker platform Many large brokers are linked with the BSE or NSE mutual fund exchange platforms, which can help you do the online investment. First, you need to log on to the online trading terminal of the broker. Nest, you can select the scheme from a list of schemes on the portal. The units will be automatically credited to your demat account. Brokers give you both online Systematic Investment Plan (SIP)facility as well as a lump sum.

    • You can choose whichever you prefer as per your requirement. Charges of this transaction may vary from broker to broker. ICICI Bank, for instance, imposes a charge of Rs 30 or 1.5% whichever is lower on SIP amount. On the other hand, HDFC charges a flat Rs 100 in each quarter regardless of the amount you would have invested. Also, there will be additional levies by the exchange and depository. Investors who are not having a demat account will have to bear an opening charge (Rs 250-750 and annual maintenance charges (Rs 300-550). Also, many brokers do not offer all the schemes of a mutual fund house

  • Online investment through Independent portals Various independent web portals such as Funds India and Fund supermart allow you to do online investment. You need to create an online account (free of cost) with them. Once done you can easily buy and sell your mutual fund units.

    • Even there are many start-ups such as Invezta, Zerodha which gives you the option to invest in mutual funds online. However, you may be charged a fee for portfolio maintenance if it exceeds Rs 50,000.

    There are various methods invest in mutual funds online as discussed above. But, one should select the method on the basis of cost, convenience & advice. Investors should consult his/her financial advisor before going for online investment. Visit us to know more about How to Mutual Funds Sahi Hai