We had discussed the differences between regular and direct plans of mutual fund schemes and the impact on absolute returns in an earlier post. Under direct plans of MF schemes, you save on distributor commissions and thus the returns are higher (than for regular plans). While the returns are higher for direct plans, there is an operational drawback too. Every time you need to invest with a new mutual fund house (mutual fund house you have not invested with before), you will have to visit the nearest office of the mutual fund house once. You can do subsequent transactions (purchase, redemption, SIP registration/cancellation) online. This need to visit MF office was a deterrent to many investors willing to invest in direct plans of MF schemes. This is where MF Utility platform comes to the rescue.
What is MF Utility?
MF Utility (MFU) is an initiative by Association of Mutual Funds in India (AMFI). MF Utility is owned by MF Utilities India Pvt. Ltd, which is equally owned by 25 participating asset management companies (mutual fund houses). All the major mutual fund houses are participants in MF Utility. MF Utility offers a transaction interface to both MF distributors and investors. The focus of this post shall be retail investors and what MF Utility holds for them.
What are the benefits MF Utility provides?
Through MF Utility, retail investors can invest in direct plans of many mutual fund houses through a single interface. You just need to the nearest office and submit CAN Registration form (along with required documents) at the nearest MFU office or point of service. CAN stands for Common Account Number. CAN is an industry level folio number. Your investments with any MF house can be identified using CAN.
Currently, your investments with a particular mutual fund house can be identified with a unique folio number. So, if you have invested with five different mutual fund houses, you will have five different folio numbers. However, under MF Utility, your investments across mutual fund houses can be identified with a single CAN. Mutual fund houses will keep folio numbers but all your folios will be mapped to CAN.
Like other investment portals, MF Utility platform allows purchase/redemption of units and registration/cancellation of systematic investments plans. If you are investing in direct plans through MF websites, you need to remember login details of each MF website. Under MF Utility, you just need to remember details for MF Utility. MF Utility also provides consolidated view/account statements for your investments across the industry.
Limitations of MF Utility
At the moment, retail investors can enter transactions only through the offline channel. The online platform is expected to be made available in the next six months*. Since the online channel has not yet been made available to investors, we cannot comment anything about the interface.
PersonalFinancePlan Take
If the online platform of MF Utility is user-friendly, it will be a serious alternative to various popular online investment platforms such ICICIDirect, FundsIndia, Scripbox etc. Since MF Utility platform allows you to invest in direct plans of mutual fund schemes (which other platforms don’t) from different fund houses, it can save you some real money over the long term. We are eagerly awaiting the release of MFU online platform for retail investors and so should you. For more information about MF Utility, please read investor FAQs on MF Utility website.
*Edited: Initially, I had put the expected date as June 2015. On further enquiry with MF Utility, I was told that this could take up to six months.
Deepesh is a fee-only planner and Founder, PersonalFinancePlan.in
Photo Credit: MF Utility Website
28 thoughts on “MF Utility Platform is a win-win for Investors”
Do they charge any transaction fees? Brokerage?
Sushant,
As I understand, there are no additional charges. Brokerage is not applicable. Your transaction requests will simply be forwarded to AMCs. Investing in direct plans through MF Utility is same as investing directly with the fund house ( in terms of cost).
Great info Deepesh!!!
So all investment payments have to be made offline?
Is that still the case?
Yes. Still no online facility for retail investors.
Had checked with them a few weeks back. No such information on the website either.
AMFI wants to promote direct plans, but wants distributor’s help to bring investors to online platform.
Don’t think AMFI cares about direct or regular plans. Its purpose would be to increase MF penetration and look after industry’s interests.
Btw, online platform does not mean direct plans. Under MF Utility, you can invest through distributors too but then you will be investing in regular plans.
Is online platform of MF Utility available?
Hi Rahul,
Yes online interface for investing in direct plans started from January 1, 2016.
Hey,
Could you please give me the link to the online interface? I cannot find any on the MFU website.
Thanks
Aditya
Hi Aditya,
You can use the following link.
https://www.mfuonline.com/
I have not used MFUtility till now but plan to get CAN soon.
Got it. Thanks a bunch !!
Hello sir,
As i am being NRI and new to investment i would like some clarity , after completing my KYC.
1st i want to know is there possibility to submit the CAN form online
2nd what is CTF-SIP and do i need CTF-SIP also with payezz to be filled out.
3rd if yes how can i do it online .
can you please give me details on which forms to fill step by step and is it possible to submit them online or i need to send the doc to mfutility address.
kindly need help setting up, as new to this without any guidance, highly appreciate your info.
thankyou
You can fill online. But you still need to take printout and mail to MFU Thane office.
So, no online submission atleast for now.
These are mere transaction forms. If you have online access, you can do transactions online No need to fill CTFs.
Register for PayEezz. Subsequently, you will be able to do everything online.
thank you very much for your feedback
Dear Deepesh,
Thanks a ton for this valuable information. My first SIP has just deducted this month and i have 4 SIPs, all regular plan. I am 26 and was planning for long term (20-25 yrs). Carrying away with this regular plans, would have eaten huge amount of my money in long run. Now i will surely switch it direct plan.
Thank you once again.
You are welcome, Gaurav.
Do share this post with friends and family.
Hi Deepesh,
i heard that camsonline also offering investment in direct funds with no charges. Which one is better?
Hi Kasi,
I had tried using CAMSOnline many months. At the time,there were many restrictions. The platform was perhaps still in the making.
You can try it out. If you are comfortable with CAMS Online, you can invest through the platform too.
There is no need to be concerned.
Just that you will be able to invest in only those funds which are serviced by CAMS.
Thanks Deepesh
Kindly let me know where MF unit will remain.
Thanks
Didn’t get your question. Can you please elaborate?
With MF Utility – Would I be able to generate my annual Capital Gains Statement like I get on ICICIDirect?
Dear Parwat,
There is no facility to generate capital gains statement from MFU website as yet.
You can download capital gains statement from respective AMC websites and CAMS and Karvy websites.
Thanks for your informative posts. I am a newbie investor and considering joining Zerodha Coin, which offers Direct plans. I will have to open a Demat account for this with them. My question is if you have a demat account, should you still get the CAN from MFU and why.
I do have some older investments in HDFC Sec and one bought from AMC directly.
You don’t need a CAN if you are investing through Zerodha Coin.
Hi Depesh
I am completely new to MF and wish to start SIPS thru direct MF but have been confused with a longterm/safe route which can be done thru a single platform.
Since I will select 4-5 different funds therefore will need to avoid HDFC/ICICI sites .
Can you advice and help plz
Regards
VIvek
Hi Vivek,
This is no more a problem.
Suggest you go through the following post.
https://www.personalfinanceplan.in/mutual-funds/list-online-direct-plan-platforms/
You will get an answer.