How to Invest in Mutual Funds Online?

Thanks to digitalization, one can now invest in mutual funds from the comforts of their home. Read on to know the steps to start investing in mutual funds in India online.

Getting Started with Mutual Funds Investment

India is currently the second-largest online market in the world. An increasing number of people now manage a host of their day-to-day activities like ordering food, shopping, booking tickets, and more right from their computer, laptop, or mobile phone.

With the growing popularity of the internet in India, today, most people prefer investing in various financial instruments, including mutual funds online . You no longer need to look for mutual fund distributors to start investing in mutual funds. Instead, you can begin investing from the comforts of your home, office, or even on-the-go.

A Step by Step Guide on How to Invest in Mutual Funds Online

So, how to invest in mutual funds online? Here are the steps you must follow-

  • Visit the Official Website of Fund House

    There are more than 40 fund houses or AMCs (Asset Management Companies) in India. Together, they offer more than 2,000 different mutual fund schemes. So, to begin with, you first need to select a mutual fund scheme in which you'd like to invest.

    Visit the official website of the fund house offering the scheme. With the growing popularity of online investments, most top fund houses now have their websites from where you can start investing. Once on the website, look for the 'Register New User' option.

  • Register and Complete e-KYC

    After clicking on the button, you will be redirected to a new page where you must enter the following details:

    • Basic identification details,

    • Bank account details,

    • PAN, and

    • Complete eKYC (Electronic Know Your Customer)

    The eKYC is an online KYC procedure where your identity and address is verified through Aadhar authentication.

    Once the eKYC is completed, it then takes 2-3 working days to get your new account verified. When your account is created, the fund house will then send an email notification informing the same. You will then be given a User ID to log into your mutual fund account.

  • Search for the Mutual Fund Scheme

    After creating a new account and setting a secure password, log into your account and look for the 'Invest Now' option. Click on the button, and you will be presented a list of all the different mutual fund schemes offered by the fund house.

    You can also search for a particular scheme mostly by entering the name in the search box. Select the scheme of your choice, and you will have its detailed information, including the NAV, investment objective, portfolio, fund manager, total assets, expense ratio, and more.

  • Start Investing

    Look for the 'Purchase Now' button, and you can then invest any amount above the minimum purchase limit. You can make a lump-sum investment or start aSIP . Note that you can only invest and withdraw your investment through the bank account you have registered at the time of creating the account.

    Based on the invested amount and the NAV of the selected scheme, you will receive fund units into your account within one working day. You can then track your investment, switch between different schemes of the same fund house, or even withdraw your investment by logging into your mutual fund account.

    Note that there can be slight variations in the steps listed above based on the fund house you select.

Choosing the Right Fund House and Mutual Fund Scheme

While it is easier to understand how to start investing in mutual funds online, the first step of selecting a fund house and mutual fund scheme is the most important and often the most complicated one.

Here are a few tips to make the right decision-

Selecting a Fund House

  • Ensure that the fund house or AMC you choose confirms to the latest regulatory reforms

  • Prefer AMCs that are highly reputed and has several years of experience

  • The fund house should have an excellent reputation among investors

  • Check the types of mutual funds schemes offered by the fund house

  • Check out their management team

  • Their online investment portal should be user-friendly

  • A secure mobile app would be a great add-on

Selecting a Mutual Fund Scheme

  • Select a scheme based on your investment profile and focus on factors such as age, investment objective, and risk appetite

  • Avoid choosing a scheme based on their recent performance

  • Compare the historical performance of the scheme with that of other top schemes in the category

  • It is better to select a scheme that has been able to deliver consistent results over a longer time horizon

  • Check the AUM, expense ratio, and exit load of the scheme

Starting Your Mutual Fund Investment Journey Online

Mutual funds are known to offer a host of benefits, and the online world has made investments easier than ever. But it is essential to research and know as much about mutual funds, especially the fund category and the specific scheme you are interested in, to make sure that your investment can deliver the expected results.

Now that you know the steps for how to start investing in mutual funds, begin your research by focusing on your investment profile so that you select schemes that best suit you and your investment goals

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