Mutual funds were unknown to investors a few decades ago. But today, they are quite popular among investors. At the end of March 2022, mutual funds are managing close to Rs 38 lakh crores worth of funds with nearly 5.2 crore SIP accounts. Despite this, many investors get confused about the process of investing in mutual funds. We explain the best and easiest ways to invest in mutual funds to eliminate this confusion.
Different ways of investing in mutual funds online
You can invest in mutual funds through online and offline methods. But with increased digitization and convenience, the online method is one of the easiest ways to invest in mutual funds.
Following are some of the best ways to buy mutual funds online:
- Investment apps like Jupiter Money, Kite, Groww, Upstoxx etc.
- Asset Management Company (AMC) website
- AMC registrar
- Demat account
- Independent portals
Mutual Fund Investment Apps
There are multiple investment apps available in the Indian market which you can use to invest in the mutual funds of your choice.
Apps like Jupiter money lets you invest in direct mutual funds without any fees. One of the best feature of Jupiter money is that even if you miss any SIPs (Systematic Investment Plan) amount due to low balance in your account, you won’t be charged any penalty for it. But, this is not true for other banks which charge heavily if you miss any SIPs due to low balance in your account. This penalty amount can range from Rs. 250 to Rs. 750 levied by other banks, whereas, in Jupiter, there are no charges associated with it. These incredible features are available to the Jupiter account users only. Best thing about Jupiter is you can easily create an account in 3-minutes. To know more about it, check the Jupiter’s offer for mutual funds here : https://jupiter.money/mutual-funds/
Asset Management Company (AMC) website
To invest in mutual funds through an AMC, you have to visit their website, and by following simple steps, you can start investing in mutual funds.
You will have to provide KYC (know your customer) documents online, and upon verification, you can become a mutual fund investor. You can avoid paying additional fees, such as distributor commission, by investing directly through the AMC. This will reduce your overall expenses and can lead to higher returns than regular plans in the long term.
However, this method of investing is not convenient. You don’t invest in different funds of the same fund house. Hence managing and monitoring your mutual fund investments can get slightly difficult.
AMC registrar
Mutual fund registrars are organizations that keep track of all activities done by investors of an AMC. They offer customized statements to investors showing the transaction history and the current value of the investments.
There are two main registrar transfer agents in India: CAMS and Karvy. Both have websites and mobile applications that give investors and mutual fund companies the required information. Apart from this, they also allow investors to invest in mutual funds.
To invest in mutual funds with registrars, you must create an account with them and become KYC compliant. Then you can start investing in mutual funds offered by them. Both Karvy and CAMS have different AMCs registered under them, and you can only invest in funds of these AMCs.
Investing in mutual funds using registrars can be easy and convenient. Apart from providing a platform to invest, they also help track mutual fund transactions and provide data about the fund’s performance.
Demat account
If you have a demat account for stocks, you can also use it to buy mutual funds. Many brokers provide mutual funds, and you can invest in them easily with a click of a button.
If your demat account doesn’t have access to mutual funds, you can contact your broker to activate the same. Investing in mutual funds through a demat account allows you to track all your shares and mutual funds in one place. Additionally, brokers also provide research insights that will help you choose a fund for investment.
But, investing through a demat account can be costly. You will incur transaction charges for every transaction and regular maintenance charges. Moreover, if you don’t have a demat account, you will also incur account opening charges.
Independent portals
Online platforms such as Groww, or Scripbox allow you to invest in mutual funds. Some offer regular plans, while some offer direct plans. However, all independent portals allow you to invest in mutual funds at a click of a button, with zero paperwork.
These platforms have unique product offerings, such as goal-based investing, that help you invest based on your financial goals. They also offer additional services such as portfolio scanning, monitoring, and rebalancing.
Investing through these portals is very convenient as you can pause, cancel, and step-up SIPs at a click of a button whenever you want. You can also track all your mutual fund investments in one place.
Documents required to invest in mutual funds online
Before understanding the process of investing in mutual funds, you will need to know the documents you require to invest in mutual funds.
- Proof of address: Aadhar card, voter’s ID, and driving license are generally acceptable documents for verifying your address.
- Proof of identity: Pan Card, passport, and aadhar card are accepted by fund houses to verify your identity.
How to invest in mutual funds?
To invest in mutual funds online, you will have to follow the process below.
Select a mutual fund to invest
First, decide on which mutual fund(s) to invest in. Choose a fund that aligns well with your goals and risk appetite. You can shortlist the funds based on your goals, then check their past returns and performance compared to the benchmark, peers, and other ratios such as alpha, Sharpe, and Sortino. Remember, investing in the right fund is always better than investing in the best fund.
Complete KYC
To start investing in mutual funds, you must be compliant with KYC (know your customer). For this, you need to have a PAN card and Aadhar card and do an online in-person verification. Once you submit your details, you will become KYC compliant in a few days.
Pay online
Once you are KYC compliant, you can start investing in your chosen fund. You can either invest in lumpsum or through SIP. If you set up a SIP through independent platforms, they will automatically debit the money from your bank account on the SIP date. If you go through the AMC directly, they will generate a unique registration number (URN), which you will add to your bank’s biller details to ensure your SIP gets automatically debited every month.
Start investing
Once you pay online, you can start investing in mutual funds. For the next fund you choose, you don’t have to go through the KYC process again. You can choose the fund and start investing in it.
How to invest in mutual funds with Jupiter Money?
You can easily invest in mutual funds using the Jupiter Money mobile application. Jupiter Money offers over 1000 direct mutual funds. You can invest in any fund or select from their curated collections.
You must follow the steps below to invest in mutual funds with Jupiter Money.
- First, download the Jupiter Money app and create an account with them.
- Second, complete your online verification, which is done within minutes in the comfort of your home.
- Then, go to the investments tab on the app and click on start SIP.
Jupiter will fetch your KYC details, and then you can start investing in any fund based on your goals. For now, Jupiter Money is open to existing mutual fund investors. We will soon be available to everyone.
Benefits of investing in mutual funds through Jupiter Money
- Zero commission fees: Jupiter Money doesn’t charge any commission from you on your mutual fund investments. This is because we offer only direct mutual funds.
- Zero penalties on SIP: If you do not have enough balance in your account, then we will automatically skip the SIP and not charge any penalty. Usually, other banks charge a penalty ranging from Rs 250 – Rs 750 for maintaining an insufficient balance for a SIP.
- Convenience: You can start investing within seconds at a swipe of your finger. You can also pause, cancel, and skip within seconds.
Frequently Asked Questions
Can I invest in mutual funds online?
Yes, you can invest in mutual funds online through the apps like Jupiter Money, AMC websites, CAMS or Karvy website, or any independent portals such as Kite or Scripbox.
How can I buy mutual funds online without brokerage?
You can invest in direct plans to avoid paying extra fees on your mutual funds. Jupiter Money offers only direct plans and doesn’t charge any commission or transaction fees on your mutual fund investments.
Which is the best way to buy mutual funds in India?
The best way to buy mutual funds is through independent portals. This is because you can invest easily and redeem, cancel, and skip SIPs whenever you want. Moreover, these portals also offer research insights, monitor your portfolio regularly, and suggest rebalancing if necessary.
How to invest in mutual funds online?
To invest in mutual funds online, you can visit AMC’s website, go to the CAMS or Karvy website, or any independent portal’s website, and create an account with them. Then you will have to complete your KYC, and once you are KYC compliant, you can start investing in mutual funds.
