Ways to Invest In Mutual Funds

Due to digitalisation, investing in mutual funds has become quick and effortless. As Indians shift from traditional assets to financial alternatives, mutual funds are rapidly gaining popularity. If you are planning to invest but aren’t sure where to start, here are some ways you can invest in mutual funds and start your investment journey.

How to Buy Mutual Funds From Investment Platforms (Regular Plans)

Individuals new to investing in mutual funds may find the investment vehicle complex and difficult to understand, discouraging them from investing. Novice investors can either educate themselves through numerous videos and blogs online or approach a SEBI-registered broker/mutual fund distributor who can help them understand how mutual funds work.

For the guidance offered by the intermediary, he investors incur costs through the distributor commission included in the scheme’s expense ratio. Here’s how you can invest in mutual funds through a regular plan.

Step 1: Complete Your KYC

Investors must complete their KYC with their PAN, Aadhaar, bank account details, and a passport-sized photograph before investing in mutual funds. Completing KYC is mandatory to start investing in mutual funds.

Step 2: Choose a Distribution Channel

You can invest in mutual funds through bank apps, mutual fund distributors, or full-service brokers, which can offer guidance.

Step 3: Select a Regular Plan

Choose the mutual fund scheme you want to invest in depending on your financial goals, return expectations, and risk tolerance.

Step 4: Choose the Investment Method

Mutual funds offer two investment methods: Lumpsum and SIP (Systematic Investment Plan). In lumpsum you have to invest a significant amount one time. In SIP, investors can pay a small, fixed amount regularly,

Step 5: Make The Payment

Once you have selected the fund and investment amount, make the payment using the available payment method, such as net banking, UPI, or an e-mandate.

How to Invest in Mutual Funds Online From AMC Website (Direct Plans)

Investors with a good understanding of mutual funds and investing experience can invest in mutual funds via the AMC (Asset Management Company) directly instead of investing via brokers and distributors. Here’s how investors can buy mutual funds directly from an AMC or fund house’s official website or app.

Step 1: Register on the AMC Website

Investors must visit the official website of the AMC, register as a new investor, and provide their PAN and other personal information to complete their KYC.

Step 2: Select the Scheme and Direct Plan

Choose your desired mutual fund scheme and opt for the Direct Plan. Next, select your preferred return option: Growth or IDCW (Income Distribution cum Capital Withdrawal).

Step 3: Select Investment Method and Bank Details

Investors must choose between a lumpsum investment or SIP investment approach and then enter their bank details, add nominee information, and complete the required FATCA declaration, in case of high-net-worth individuals (HNIs) or wherever applicable.

Step 4: Make the Payment

Pay the first SIP or lumpsum investment amount through Net Banking or UPI and start investing in mutual funds.

How to Invest in Mutual Funds Through CAMS and KFintech

Here’s how you can start investing in mutual funds through CAMS and KFintech.

Step 1: Register

Visit the CAMS or KFintech investor portal or use its mobile app and register yourself.

Step 2: Complete KYC Verification

Provide all information asked for along with the documents and complete any required verification.

Step 3: Select the Mutual Fund

Go to the transaction or investment section, choose the AMC and mutual fund scheme you want to invest in, and select the Direct or Regular Plan.

Step 4: Enter Investment Details

Choose an investment method: Lumpsum investment or SIP. Investors have to enter the lumpsum investment amount or the SIP amount. They must also provide their bank and nominee details.

Step 5: Make the Payment

Pay the lump-sum investment amount or the first SIP to start investing in mutual funds.

FAQs

What is the difference between an investment platform and an AMC website?

Platforms sell Regular plans through brokers, while AMC websites sell Direct plans without middleman fees, giving you higher returns over time.

What are CAMS and KFintech?

They are service platforms that manage records and process transactions for different mutual fund companies in India.

Do I need to complete my KYC before investing?

Yes, you need to complete your Know Your Customer (KYC) verification before you can buy any mutual fund, as it is a mandatory requirement.

What is FATCA?

FATCA is a simple tax declaration form that is mandatory for all HNIs investing in mutual funds to prevent tax evasion and comply with global financial reporting laws.

Can I invest using both lump-sum and SIP options?

Yes, you can invest in mutual funds using both lumpsum and SIP options. You can make a lumpsum investment towards the funds upfront and then continue investing via SIP.