One-stop shop for mutual funds- Business News

One-stop shop for mutual funds

Service providers go online to make investing in mutual funds convenient and faster.

 Jinsy Mathew   
  • October 29, 2015  
  • |  
  • UPDATED   11:53 IST
Online mutual funds.
Online mutual funds. Photo: Big Stock

Gone are the days when a mutual fund applicant had to physically fill an application form and submit it either to a fund house or a collection centre to open an account. These days, all these processes are a matter of just a few clicks. Now, an online mutual fund (MF) account can be opened in 15 minutes if one is KYC (know your customer) compliant. Convenience and speed are the two facets that make online mutual funds attractive.

Requirements for opening an online MF account

  • Know your customer (KYC)
  • Permanent Account Number (PAN)
  • Online banking account
  • Mobile number
  • Operational email id
Companies offering this facility
Almost all mutual fund houses provide this facility on their respective websites along with standalone online service providers such as Aditya Birla Money MyUniverse, ICICI Direct and MF Utility. Independent portals like Fundsindia and Fundsupermart, which are online investment service platforms, are other options one can consider.

How to open an online account
For those who are KYC compliant:

  • Go to the mutual fund website of your choice and select 'Invest Online'.
  • The first step will be PAN validation where you will have to key in your PAN number.
  • Assuming you are KYC compliant, the next step entails entering all your personal details followed by your bank details.
  • Specify the investment amount and the name of the fund you wish to opt for.
  • Next, there will be a provision to set a username and password to enable your online login.
  • After this, there will be an option to upload a scanned copy of a cancelled cheque which will complete all the formalities.
  • The fund house gives you a call to verify the details and within a day's time your request is processed.
  • Once that's done, you can start your transaction.
For those not KYC complaint:
  • Many fund houses provide an option where you can leave your name and contact number.
  • A representative from the company calls you and helps you through the KYC procedure.
  • Companies such as, Aditya Birla MyUnivere and Association of Mutual Funds of India's MF Utility have brought a digital twist here too.
  • The applicant is allowed to scan and upload all the required documents online.
  • Once a suitable time for in-person verification is selected, the credentials of the applicant are verified through video conferencing.
Cost of investing
  • One of the attractive features of investing via the online route is lower expense ratio.
  • Every mutual fund scheme has two different plans-direct and regular.
  • Investing directly through a mutual fund website, bypassing the distributor, is considered a direct plan.
  • Any investment made through an intermediary such as agent/distributor/online platforms is termed as a regular plan.
  • The difference in expense ratio between a direct and regular plan is as much as 1 per cent.
Other benefits
  • Based on risk assessment, both ICICI Direct (InstaAccount) and Aditya Birla MyUniverse (ZIPSIP) present the user with a list of mutual fund options.
  • No hassle of submitting documents in person.
  • Up-to-date dividend and capital gain details available.
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