Most online platforms minimize the paperwork required, which is the biggest deterrent today
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Online mutual fund platforms on the rise

Online mutual fund platforms not only offer a convenient and hassle free way of investing into mutual funds but they are also safe and secure

  • September 10, 2015  
  • |  
  • UPDATED   11:44 IST

  Gone are the days where you had to fill each application form for investing into mutual funds physically and go to the fund house or collection centre to submit the same. Today, online mutual fund platform not only offer a convenient and hassle free way of investing into mutual funds but they are also safe and secure.

The latest in fray is a new platform called Insta Account launched by ICICI Direct, which is a paperless mutual fund investment account and you do not need to have an ICICI Bank account to use this facility. "Today internet and smartphones have provided customers the convenience of taking decisions instantaneously - from shopping for groceries to selecting a house, everything is done on the go", says Vineet Arora, EVP, ICICI Securities.

Most platforms are trying to minimize the paperwork required, which is the biggest deterrent while investing today. The Insta Acocunt, like other platforms, allows you to register online, checks your eligibility, quickly verifies your details and generates a user ID for you. They offer research to help you chose a fund as per your need, monitoring of your portfolio with the help of detailed asset performance report, capital gains and dividends statements.

You can open this account only if the status of your KRA application form is "verified" else it could be a lengthy process. Also, it does not allow you to invest into all mutual fund houses, only the ones mentioned on their site. Most banks can be linked with your account and has the option of registering 3 bank accounts.

"Today almost 10% to 15% of mutual fund investors invest online" says Srikanth Meenakshi, Founder and COO of FundsIndia.com, which was the first online mutual fund platform launched in 2008 when Meenakshi saw the need for transacting in a much more hassle free manner. FundsIndia not only registers you online, you can upload your scanned documents for verification including that for KYC and a follow up video conference is conducted to verify your identity and details.

The only paper they require is that of a bank mandate from the bank you wish to transact. They offer research advisory services, a variety of SIPs including Value SIPs, which invest based on market levels and Step Up SIPs, which allow you to increase or decrease your investment.

"Investors can choose SIPs, switch their funds, redeem or auto balance, all at the click of a button", says Meenakshi. You can also open your family and minor accounts.  Most of these platforms offers these services free of cost to investors, as they earn their commissions from fund houses directly.

AMCs also offer investors the choice of investing online on their websites. This is the cheapest route for the investor because the facility comes absolutely free and one has the choice of investing directly without an intermediary, which means a lower expense cost.

However, this is only suited for those who are well informed and have done their research. Also, fund websites may not be the most convenient route as a first time investor you will need to physically approach the fund house to submit the application form and the KYC. Also to invest into different funds you will have to go through the entire procedure again.