Want to start investing in mutual funds? Confused about where you should begin? Check out this post to know the detailed steps and other details to start your mutual fund investment journey online and offline.
A lot of new investors find the process of purchasing mutual fund complicated and confusing. While most AMCs (Asset Management Companies) now have their online platforms from where investors can buy mutual funds, a lot of beginners are unaware of the steps they should follow.
Also, while an increasing number of investors now prefer to invest in mutual funds online offline investment too remains popular.
If you are searching for tips on how to buy mutual funds, the detailed steps for online and offline purchase are discussed below:
To begin with, let us first have a look at the crucial part of your first mutual fund purchase process- completing KYC or eKYC.
As per SEBI regulations, every new investor must complete Know Your Customer (KYC) or Electronic Know Your Customer (eKYC). You can either complete KYC (offline) or eKYC (online). This is a one-time process. You only need to complete it once when you invest in mutual funds for the first time.
If you are investing online, the eKYC process can be completed through the fund house whose mutual fund scheme you select or by directly visiting the online portal of KRAs (KYC Registration Agencies) like CAMS, KARVY, NSDL, or CDSL.
It is a simple online process that requires you to fill the eKYC form and upload scanned images of your ID and address proof. Note that PAN (Permanent Account Number) is mandatory for mutual fund investment. You will also need your Aadhar-registered mobile number for completing the verification.
If you want to complete the KYC process offline, you will have to visit the nearest branch office of the fund house you have selected. Request a KYC form and fill the same before submitting it along with copies of your ID and address proof.
Also, note that if you have ever invested in the past, you might have already completed the KYC process. You can check it by visiting the website of the KRAs listed above and entering your PAN. If you are KYC compliant, you are not required to go through this process again.
So, how to purchase mutual funds online? Follow these steps
Visit the official website of the fund house whose scheme you are interested in and click on the “Register New User” button.
You will be redirected to a new page where you will be asked to fill the registration form. You will have to enter details such as name, address, bank account details, PAN, Aadhar number, etc.
After entering the details, you will have to complete the eKYC process, if you have not completed it already.
Once the eKYC is done, it can take a few days for the fund house to create a new account
You will receive an email with your login details from your fund house once your account is created.
Login to your account, and you can find details of all the different schemes offered by the fund house.
Select the scheme of your choice and enter the investment amount before completing the online payment.
You can either make a lump sum payment or start a new SIP . It can take up to 1 working day for the fund house to credit your account with the fund units.
If you want to go through the offline method, you will have to visit the nearest branch office of the fund house. You can fill an investment form and provide details like your name, address, PAN, Aadhar number, etc. along with the details of the scheme you want to invest.
The payment can be made through cheque or demand draft. It can take 4-5 working days for the fund house to allot the fund units to your name. Alternatively, the investment form, along with the cheque or demand draft, can also be submitted at any of the POS (Point of Sale) of registrars like CAMS or Karvy.
Even banks can help you start investing in mutual funds offline. You can visit the nearest branch of your bank to know more. The investment process through banks is also the same. You will have to submit an investment form along with payment through cheque or demand draft.
Apart from how to purchase mutual funds, you should also know about NACH if you want to invest through SIP. National Automated Clearing House (NACH) mandate is now compulsory for starting SIP. It is with the help of the NACH mandate that your fund house gets the permission from your bank to debit the SIP amount from your bank account.
You can download the NACH form from the official website of your fund house. Take a print out of the form and fill the details. The form can be sent to your fund house through the post, or you can upload a scanned copy online.
The fund house will then send this form to your bank, which will then forward it to the NPCI (National Payment Corporation of India) for confirmation. Your bank and fund house will be notified once your request is successfully confirmed.
Before investing, it is necessary to thoroughly understand the entire investment process to avoid any costly and time-consuming mistakes. These are the detailed steps for how to purchase mutual fund online and offline to help you begin your investment journey in a hassle-free manner.
If you have any queries, you can get in touch with your fund house online or through the phone. Alternatively, you can also visit their branch office of the fund house to get detailed answers to all your queries.