How to Buy & Invest in Mutual Funds Online: Top 4 Ways to Follow
Digitisation has impacted every aspect of life. Now, you can also invest in mutual funds online with just a few clicks. You don’t need to seek any help from an agent or intermediary. Here you will get a clear understanding of the different ways of how to buy mutual fund online.
Ways to Buy Mutual funds Online
Today most AMCs (Asset Management Companies) and other platforms now have online space from where you can buy mutual funds accordingly. So if you are a beginner and unaware of the steps associated with buying funds online, consider the following ways and look out for the related steps.
How to Buy Mutual Funds From Investment Platforms (Regular Plans)
Normally, buying a mutual fund involves a complex process. But today you can buy mutual funds seamlessly using any online investment platform. These platforms enable you with tracking, investing, and managing all your mutual fund investment schemes with different AMCs in a hassle-free manner. Here are the steps you need to follow:
- First, create an account with an investment platform.
- Select your suitable scheme or plan.
- Now select the required payment type such as SIP or lump-sum and the total amount.
- Enter your personal details in the required fields like PAN and bank details.
- To complete the whole procedure transfer money online.
How to Invest in Mutual Funds Online From AMC Website (Direct Plans)
You can purchase direct plans of mutual funds if you prefer to avoid the hassle of going in person. In this case, all details like your PAN, and address proof are required along with bank details in order to complete the whole process. To invest in direct mutual funds you can follow these simple steps.
- Open a new account with AMC.
- Fill in the necessary personal details for the investment.
- Now fill in the FATCA (Foreign Account Tax Compliance Act) form.
- Provide your bank details and upload an image of the cancelled cheque.
- Verify the whole KYC through an Aadhaar number and finally transfer money
- Once done you will receive a confirmation message on your registered email ID or number.
Step-wise Guide to Invest Through CAMS and Karvy
If you are wondering how to invest in mutual funds through a registrar and transfer agent like Karvy and CAMs, then follow the steps below:
- First, create an account with either of the two.
- Provide your folio number (it is the unique client code allotted to investors by a fund house (Asset Management Company).
- Select the suitable scheme you want to invest in and make the required payment.
Steps on How to Buy Mutual Funds Online Through a Demat Account
You need to have a Demat Account for investing in mutual funds. To open a Demat Account:
- You need to select a depository participant (DP).
- After selecting a DP, now you have to submit the application form, and identity proof like PAN, Aadhaar or other important KYC documents. Accordingly, the depository participant will verify the KYC information and then it will approve your application.
- Finally, you will receive an account number and your password through which you can access all your investments in multiple mutual funds.
On the contrary, if you already have a Demat Account, investing in a mutual fund does not require additional effort. For investing in mutual fund through your Demat Account, you need to follow the following steps:
- Log in to your Demat Account and look for the preferred option to invest in a mutual fund.
- Now, you need to select a suitable fund for investing.
- Finally to complete the investment transfer the amount online.
On the other hand, you can invest in different mutual fund schemes by visiting your nearest branch office of the fund house or through a broker. All you need to ensure is to provide the necessary documents like:
- Proof of Identity
- Address Proof
- Passport size photograph
- Cancelled cheque leaf.
Advantages of Investing in Mutual Funds Online
Here is a list of a few advantages of investing in mutual funds online:
- Investing in different mutual funds online involves no complicated procedures. As a result, it takes less time to invest.
- Once your KYC details are updated, there is no hassle to invest in multiple direct mutual fund schemes across different platforms.
- Another notable advantage of buying mutual funds online is that there is no restriction in choosing different mutual fund plans. However, when you the offline mode, you can only choose from a limited number of mutual fund schemes.
- The entire process of online investment in mutual funds is designed considering the security of the investor’s fund and portfolio in mind. The SEBI constantly reviews and monitors all market transactions, ensuring that there is no foul play. Therefore in simpler words, investing in mutual funds online is safe and secure.
- Lastly, if you register yourself with an AMC, there is no need to repeat the same in the future while investing in any mutual fund scheme from that company.
Things to Consider Before Investing in Mutual Funds
Now that you know how to buy mutual funds, you should consider certain aspects before you start investing in a mutual fund:
- You should plan out your objectives as per your investment goals. For instance, for long-term goals, you can invest in growth-oriented equity funds. On the contrary, if you plan for a short-term goal, you should look out for funds that are easy to redeem.
- Another major factor to consider is to evaluate your risk tolerance. Each fund has a different variation of risk and returns and so for assured high returns, it is necessary to prepare a proper risk analysis of the funds.
- You should also consider the consistency of the fund performance. In such a case compare the 3-5 years of performance of the fund to make an informed financial decision.
Online mutual fund investment platforms offer a paperless, easy and hassle-free investment experience. So to purchase mutual funds conveniently, you can opt for the online method.