Direct plans of mutual fund schemes offer better returns than regular plans. This aspect of mutual fund investing is not lost on many. However, a lot of people find it cumbersome to visit nearest mutual fund offices for every new AMC (Asset Management Company or mutual fund house) they want to invest with. I have mentioned in many of my earlier posts that you need to visit AMC office (mutual fund branch) at least once. However, this requirement is no longer true. You do not need to visit nearest AMC office to invest in direct plans of mutual funds. If you are comfortable with online transactions, you can invest online. There is no need to visit AMC office to invest in direct plans of mutual funds. Even first time investors with the fund house can invest in direct plans online.
What do you need to invest in Direct plans online?
Most AMCs allow you to make investments online. You just need the following:
- You need to be KYC Compliant.
- You should have access to net banking
- And yes, you should be comfortable with online transactions.
You don’t have to submit any proof for KYC compliance. AMC finds it out itself based on your PAN. You need net banking to make payment for purchase and register for SIPs (systematic investment plan).
Go through this post to understand why you should invest in direct plans of mutual funds scheme. For common doubts investors have about direct plans of mutual fund schemes, please go through this post.
How to check if I am KYC compliant?
If you have already invested before with any of the fund houses (AMCs), you will be KYC compliant. Otherwise, the fund house would not have let you invest with them. Or else you can go to following links
You just need to enter your PAN number to find out if you are KYC compliant. If you are KYC compliant, you are good to go. You can visit the AMC website and invest in direct plans of MF schemes online.
What if I am not KYC compliant?
The process is simple.
- You can download KYC form from any of the AMC or KRA (CVL, CAMS etc) website.
- Fill up the form. You need to provide self attested copies of ID proof, address proof, PAN card and photograph
- Submit the form along with the self attested copies to nearest AMC office, RT agent (such as CAMS and Karvy). Do carry the original documents for verification.
In a few days/weeks time, your KYC status will reflect in the two websites mentioned above.
Once you are KYC compliant, you don’t have to repeat this exercise.
What about e-KYC?
Some AMCs such as Reliance MF and Quantum AMC have started e-KYC services for the first time investors. Reliance MF e-KYC still requires some documents to be mailed to their office. Quantum AMC e-KYC does not require you to mail any documents to their office. Under e-KYC, you are required to upload ID proof, address proof and PAN copy. In-person verification (electronic) is done through video conferencing.
Please understand e-KYC is meant for those who are not KYC compliant. If you are already KYC compliant, you don’t have to do e-KYC. Additionally, once you finish e-KYC with Quantum AMC or Reliance MF, you can invest with other MF houses too.
Can I even start SIPs in Direct plans online as a first time investor?
Yes, you can. When you register for SIPs on AMC website, you will be issued a Unique Registration Number (URN). You can go to Biller or Utility Payment or Manage Biller section and register the fund house as biller using the URN. And you are done. The SIP amount will get debited automatically (periodically) and get invested in the selected mutual fund scheme.
Funds (AMCs) where you can invest online
Please note I am talking about AMCs where you are the first time investor. If you are an existing investor, all fund houses allow you to transact online. If you are an existing investor (regular plans) with the AMC, you can invest in direct plans of the funds online from the respective MF websites.
I tried to invest with following fund houses (as a first time investor). With one of the AMCs, I actually invested (in my wife’s name). With the other fund houses, I dropped the transaction after reaching the payment page.
ICICI Prudential Mutual Fund: New Investor Link
Franklin Templeton India: New Investor Link
Axis Mutual Fund: New Investor Link
Quantum Mutual Fund: New Investor Link
For the remaining fund houses, I did not try. You can try out on your own. I am sure most AMC or fund houses allow you to invest with them online (even if you are a first time investor with them). Do remember to select Direct Plans while investing. If any mutual fund house does not provide such facility at the moment, I am not sure it will in the next 6-12 months. No fund house can afford to be behind competition.
Here are some of the ways you can invest in mutual funds.
- Contact your local distributor and invest in Regular
- Open account with online portals such as ICICIDirect, FundsIndia and Scripbox. Invest in Regular Please understand local distributors and online portals are not evil because they make you invest in regular plans. They need to be compensated for the convenience and advice they offer.
- Go to a bank and invest in Regular Plans. Avoid this channel. From what I have seen, bank officials are least equipped to offer mutual fund investment advice.
- DIY (Do it yourself) investors can invest in Direct plans online or by visiting nearest AMC branch.
- Contact SEBI Registered Investment Advisors for MF advice and invest in Direct Plans online or by visiting nearest MF branch.
- Open account with MFUtility and invest in Direct plans across mutual fund houses. Unfortunately, investors cannot invest online in direct plans as yet. At the moment, they can invest in offline mode.
If you understand the benefits of investing in direct plans of mutual funds, then don’t wait. Don’t wait to visit the nearest AMC branch if you are a first time investor. Don’t wait for MF Utility to offer investments in direct plans (online). Get your net banking login details ready and start investing in direct plans of mutual fund schemes.
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