Many individuals want to create wealth by investing in mutual funds these days. But they don’t know how to invest? In many cases, they want to know the process of investing in mutual funds. Investing in funds seems complicated if you don’t know how to invest. However, the process of investing is very easy and simple. In this post, I will discuss how to invest in mutual funds.
Table of Contents
What is Mutual Fund?
A mutual fund is a professionally managed investment fund that collects money from investors and invests the money on their behalf. They invest the collected money in shares, bonds, and other securities. Each investor owns a share in the profits or losses of the fund in proportion to their investments. These are an ideal investment option if you don’t know much about investing. All the funds are registered with SEBI (Securities and Exchange Board of India).
How to Invest in Mutual Funds?
You can invest either via online mode or offline mode. However, KYC compliance is mandatory to invest in mutual funds in India. You also need a PAN number and a bank account.
KYC Compliance
If you are not a KYC compliant then you have to go through the KYC verification process with a KYC registration agency. KYC verification is a one-time process post that you can invest in any funds. You can become a KYC compliant in the following two ways.
1. Offline KYC process
2. Online KYC process (eKYC)
Must Read: How to do KYC for Mutual Fund Investments – KYC Process in Mutual Fund
How to check your KYC status?
If you are existing investors or you have submitted your KYC applications then you can check your KYC status with any of the KYC Registration agencies using your PAN number.
1. NSE KRA website
2. NSDL KRA website
3. CAMS KRA website
4. Karvy KRA website
5. CVL KRA website
How to Invest in Mutual Funds via offline mode?
To invest via offline mode, you need to visit AMC (Asset Management Company) office and fill the offline application form. Submit the duly filled application form along with cheque or demand draft.
You can also submit the filled application form to CAMS office, Karvy office, or office of MFU (Mutual Fund Utilities). Your bank or a mutual fund advisor may also help you in investment via the offline route.
If you are not a KYC complaint then you also need to fill a KYC form and submit it along with the necessary documents.
How to Invest in Mutual Funds online?
Thanks to technology and the internet, investing in funds has become easy and hassle-free. Just a few clicks and you can buy any fund. You may invest through AMC (Asset Management Company) websites, Registrar & Transfer Agent (like CAMS, Karvy, etc.) websites, MFU, independent websites, or bank websites.
You can also invest in fund schemes from the comfort of your home through a host of apps. There are several apps available, just install and start investing in mutual fund schemes. All these apps are convenient and simple to use.
Plan your fund
Once done with the KYC verification, now choose a fund that is most appropriate based on your needs. Always choose a fund based on your risk appetite, investment horizon, and investment goals.
According to mutual fund advisors, you should invest in debt funds for short-term goals. And invest in equity funds if you have long-term (minimum five to seven years) financial goals. However, if you are new to investing then you should consult a mutual fund advisor for personalized advice.
Invest through the online route
Once you have decided on the fund scheme, you can invest online through any of the options mentioned above. You may invest via a lump sum or SIP (Systematic Investment Plan) route. Start your SIP by adding the AMC or intermediary as a biller in your net banking.
Must Read: Tax on Mutual Funds – How mutual funds are taxed in India
Final Thoughts
Investing in mutual funds is becoming very popular among investors for the benefits they provide. You can invest in mutual funds either via online mode or offline mode. Note that every mutual fund’s investor in India should be KYC compliant. However, the process of investing is very easy and simple.
Note: This post was originally published on July 4, 2018, and has been completely updated for accuracy and comprehensiveness.
Also read: What is mutual fund | Types of mutual funds
Also read: How to Exit and Redeem Mutual Funds?
thank you for shearing this investing knowledge. very useful article for invest in Mutual Funds.
Its seems a great effort from you. thanks for sharing
Keep it up
Hey Thanks for sharing how to invest in mutual fund now i got idea.