Easy Steps to Invest in Mutual Funds Online

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Easy Steps to Invest in Mutual Funds Online

Mutual funds are one of the best investment instruments in the market. It allows the investor to reap the benefits of higher returns due to the presence of a diversified portfolio of stocks and bonds. It is broadly based on investment objective, structure, and nature of schemes. Most investors, especially the early ones always puzzled about how to invest in Mutual Funds. There are mainly two ways to invest in the mutual fund either through online or offline. In case, if you are computer savvy then you may choose the online mode. But In case, if you prefer the old-world method, then it’s better to opt for the offline mode. To invest in mutual funds online, the investor needs to follow these simple procedures:

Step 1:   Go to the website of either of the following:

  • Asset Management Company
  • Registered investment advisor
  • Mutual fund distributor

Step 2:  Make sure to complete the E- KYC form available on their respective websites. An Investor needs to submit the self-attested copy of the following documents.

  • An Indian National identity proof.
  • PAN Card
  • An address Proof
  • A Passport sized photograph

Step 3: Afterwards an investor needs to complete the In-person verification as mandated by market regulator SEBI (Securities and Exchange Board of India) to invest in mutual funds online.  There are two ways to complete the IPV. An Investor needs to visit either of the following institutions and submit the original copy of the above-mentioned documents.

  • KYC registration agency (KRA)
  • AMC
  • Mutual Fund agent/ distributor
  • Mutual fund Registrar

The user can choose to complete the IPV via video conferencing at a pre- agreed time with the concerned party. After completion of the IPV, complete the mutual fund application form which will usually take 5-7 days. Apart from the application form, also submit the investment amount. In case, if you wish to invest via a SIP, fill and submit the SIP form along with the application.

Before investing in mutual funds make sure that you have a proper goal in the mind.

Afterwards, keep an investment horizon as well as analyze your risk appetite.  But the biggest question in front of investors before they invest in mutual funds online is, how to select a mutual fund?

  • Performance Consistency:

Performance consistency is the key benchmark for selecting any mutual fund for the investor. A good mutual fund is one who generates good returns for its investors consistently over a period.

  • Experience of the Fund Manager:

This is one of the most important factors before considering any mutual fund. A fund manager must have a past reputation of generating good returns both in a bear or bull market. The experience of the fund manager also plays a critical role in this.

  • Performance against Benchmark:

Before selecting any stocks, make sure to analyze its performance against the benchmark index. A benchmark index of a mutual fund scheme is a standard against which allocation and performance are compared.

  • Expense Ratio:

The expense ratio is a critical factor to look forward before selecting any mutual fund. It’s mainly the fee charged by an AMC for administration, management, promotion and distribution of a mutual fund. Direct plans of mutual fund have a lower expense ratio compared to the regular one.

 

Disclaimer: Mutual fund Investments are subject to market risks. Please read the scheme documents carefully before investing. 

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