New smartphone
Mutual Funds can be a powerful vehicle to Financial Freedom. There are several websites, blogs and magazines dedicated to the same. But do you know different channels through which you can invest in Mutual Funds?
There are mainly 6 channels
Your Demat Account
Through advisors/ banks etc
Online through respective Mutual Fund Sites
Direct through Mutual Fund registrars - CAMS/Karvy
Direct to Mutual Fund Offices - by post/physically handing over
Dedicated websites which offers various mutual fund schemes
We take a detailed look at advantages & disadvantages along with the process for investing through each channel
Demat Account
Demat Account makes sense only for people investing directly in stock markets and so not everyone would have it.
Advantage:
You can buy/ redeem a MF with click of few buttons right at the comforts of your home.
You have consolidated portfolio in one place. So becomes easy to manage.
No tedious process of form filling or giving documents every time you buy MF.
Invest instantly. Suppose markets fall suddenly @ 2:30 then you can invest before 3:00 to get the same day NAV & hence buying at lower price.
Disadvantages:
Its the most costly channel. Even with abolition of entry load demat accounts like Reliance Money charges 2.25% for buying Mutual Fund.
Not all schemes are offered by all demat accounts.
Through advisors/ banks etc
You have a financial advisor for you and you can buy from him directly. You just need to call him & he would collect the form & required documents from you.
Advantage:
Easy process of investment.
Good channel for people who are not net savvy.
If you have a good financial planner they advise you good schemes.
Disadvantages:
Fee based system: You need to pay your advisor either an annual fee / visiting fee or commission based fee.
The advise may not be in your interest and he may advise you funds where he gets high commission. (unfortunately this is what happens most of the times)
Online through respective Mutual Fund Sites
This is a very good channel & I personally prefer this. But the problem is very few MF offers this facility. But then you can always find good schemes among them.
The process of investing online through MF sites is more or less similar for all MFs.
You can either download the form from their sites of fill it online (if they have the facility).
Fill up the form & attach your attested copy of PAN Card, bank cheque photocopy along with the payment cheque.
Fill up the PIN agreement form available on their website. This is necessary as you would need a PIN Number to log in to your MF account.
Courier these filled forms & documents to respective MF address, or submit it physically to their registrars - CAMS/KArvy.
In about 2 weeks you would receive the PIN number & wholla you are all set to invest online.
Advantage:
You have all the advantage of Demat account here.
No commission/ fee or hidden costs.
Disadvantages:
the first investment should be in physical form. So you need to invest through your advisor/ or other physical channels to start with.
All Mutual Funds have different websites & different Pin numbers. So if you invest in large number of schemes tracking them would be difficult. Also you would need to remember multiple folio numbers and passwords.
List of Fund Houses offering Direct Online investments
HDFC
Reliance
Principal
Birla Sunlife
ICICI Prudential
IDFC
TATA
Quantum
Morganstanley
Kotak
Franklin Tempelton
UTI
Fidelity
Bharti AXA
Mirae Asset
SBI
Sundaram BNP
Direct through Mutual Fund registrars - CAMS/Karvy
Here you need to download the form from respective MF site & fill it up. Attach photocopy of you PAN Card & submit it physically to the CAMS/Karvy office in your city. The registrar would attest your PAN card. So keep the original PAN Card with you if you are submitting an unattested PAN photocopy.
Advantage:
Its a direct channel so no commission whatsoever.
Disadvantages:
You need to physically go to office to submit. So not viable for everyone especially in small towns. Every time you make an investment you need to fill up lengthy investment form. But if you invest in a fund which offers online investment facility you can invest online subsequently.
No comments:
Post a Comment