Wednesday, 21 June 2017

How to invest in mutual funds online?

Mutual Funds

How to invest in mutual funds online?

What are mutual funds?
Mutual funds are an investment vehicle for investing in stocks and bonds. Mutual funds pool money from a large number of investors and invest this money in securities such as stocks, bonds, money markets instruments and similar securities. Mutual funds are managed by professional fund managers, who invest the fund's money in various securities and attempt to produce capital gains for the fund's investors. Every investor has a share in the gains or loss of the fund. Investing in a mutual fund is much easier than buying or selling individual stocks and bonds on your own. Benefits of investing in mutual funds

How to invest in mutual funds online?
With the rapid growth of the internet, the use of online services has become quite popular among people. Most of the financial transactions are completed online – whether it is online shopping, transferring money or investing in mutual funds. You can invest in mutual funds online through AMC (Asset Management Company) websites, brokers’ platforms or independent websites.

KYC compliance
KYC compliance is compulsory for investing in Mutual Funds in India. You have to fulfill KYC verification requirement with a KYC registration agency. KYC verification is one-time exercise post which you can invest in any mutual fund in India. There are two ways to become a KYC compliant - offline KYC process and eKYC process (online). These days, it is possible to complete your KYC online through certain fund houses or transfer agents in the following ways.
Mutual Funds

PAN card based e-KYC
Some fund houses offer this service. The entire process is easy and simple. You have to fill a form online. Take a print out of this form, paste a photograph and sign on it. Now upload its scanned copy along with other relevant documents. Documents required would be PAN card, proof of identity, proof of address and a photograph. Your in-person verification will be done using a webcam or your smart phone without going anywhere.

Aadhaar card based e-KYC
In this process, you have to provide your Aadhaar number and the mobile number (registered with the Aadhaar card). An OTP will be sent to your registered mobile number. You have to enter the OTP. You have to also upload a scanned self-attested copy of your Aadhaar card. This method has some restrictions. You can invest up to a maximum of Rs. 50,000 per annum in one fund house.

Always opt for PAN card based e-KYC instead of Aadhaar card based e-KYC to avoid investment limits.

Check your KYC status
You can check your KYC status with your PAN number with any of the KYC registration agency

Investing in Mutual Funds online
Mutual Funds

Decide your fund
Once you are KYC verified, you can invest in mutual funds online. Now you need to identify which mutual fund is best suitable for you. There are various types of mutual funds schemes are available in the market. Therefore you should choose the mutual funds based on your risk profile and personal goals. You also need to decide the medium of your investment: Direct or through an advisor or a distribution house.

Invest online
Once you have decided the mutual funds scheme you want to invest in. Visit the website of the Mutual Fund Company or AMC (Asset Management Company) whose mutual funds you want to invest. Complete a simple registration process and create a folio for your investment. All the subsequent transactions in the folio will be possible online using your bank account. But if you want to invest in other fund houses, you need to go through the entire process again through their websites. If you choose to invest through independent portals then you have to open an account with them. Once you have opened an account, you can buy mutual funds of various fund houses online using your bank account. You can also invest in mutual funds online through brokers portal if you have a Demat account.

Systematic Investment Plan (SIP)
You can also start a SIP. You need to decide the date and duration of the SIP. You have to give a standing instruction to intermediary / Mutual Fund Company and the money gets debited automatically from your bank account on investment date and gets invested into SIP. This can be done by submitting a mandate to the Mutual Fund Company / intermediary or by adding the Mutual Fund Company / intermediary as a biller in your internet banking. What is SIP?

You may also like to read: Equity Linked Savings Scheme (ELSS)
You may also like to read: How to set your financial life in order?

If you liked this article, share it with your friends and colleagues through Twitter or Facebook. Your opinion matters, please share your comments. 

Citibank IN CPA - Credit Card IN



  1. Thank you for sharing such valuable information and knowledge. It is very useful and informative. It would be great to see more updates from you soon.

    Trading Mentor Program

  2. Very nice information. I will be useful to me.

  3. Very helpful and informative post, bookmarked it.