Mutual fund (MF) has become one of the choicest investment options these days owing to the affordability, high returns, and easy options to liquidate. However, there are many people who are still perplexed about the concept of MF. To help such individuals, here’s a detailed view into the world of mutual funds:
What is Mutual Fund?
A mutual fund is a type of online investment wherein the money from several investors is collected and further invested in different funds that fit your financial goals. The primary advantage of investing in the mutual fund is that you can start investing in MF from Rs 500 and go higher gradually. The second thing that woos more customers towards MF is that there are fund managers who invest your money accordingly, so you need not worry about anything, just sit back and watch your investments grow with time.
Is it important to open a Demat account to invest in mutual funds?
It is not mandatory to open a Demat account to invest in mutual funds. Instead one can invest in mutual funds online with the help of three lucrative ways:-
1. Through Asset Management Company (AMC) Websites: There are many companies which allow individuals to invest in mutual funds online. For this, you need to first visit the particular website, download and fill up the scheme form from the website and submit it with the required documents such as PAN card, KYC letter. In addition to this, you must also apply for the personal identification number (PIN) to instigate easy transactions online. Once you receive the folio number along with the PIN, you can easily do other transactions in the folio with the help of your bank account. If you want to invest in other types of funds, you need to repeat the same method again. This is one of the easiest ways to invest in MF and this service comes absolutely free of cost.
2. Via Brokers Online: There are a number of online brokers associated with the mutual fund's exchange platforms. Amongst several brokers, there are few big-scale brokers who are associated with the NSE or BSE, the most popular MF exchange website. To begin with, all you need to do is to visit the online trading platform of the particular broker, select the scheme you want to invest in. The extent of your ownership will be directly credited to your Demat account. In case you do not have a Demat account, you can go for a SIP and invest the amount. The charges associated with this process are not too expensive and vary from one broker to the other.
3. Independent Online Portals: Some independent online platforms are also available where investors can buy and sell MFs at no added expenditure. To start investing with this method, you simply have to sign up on any of these platforms, fill the form available on the website, take a printout of this pre-filled form, sign it, and send the form with the attached copy of PAN card and KYC acknowledgment letter. Upon completing this process, you can purchase MFs from various fund houses. These portals are in partnership with the top-notch banks across the country for superior online payments service. Apart from offering the service at no additional cost, these portals also work hard to provide an affable, pleasant experience to the investors. On top of it, these portals also help you keep a close eye on your funds and provide an appropriate research and testing platform to help investors build an ideal MF portfolio.
So now that you know the right ways to invest in MF, you may initiate your research and start investing!
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