How to Invest in Direct Mutual Funds - Online & Offline (2024)

Direct Funds ensure that the commission you would have otherwise paid is saved and added to your returns without the help of any middlemen.

Therefore, the crucial query is how to invest in Direct Mutual Funds in India, so if you’re wondering about “How to Buy Mutual Fund Directly?”, this blog is just for you!

As it turns out, you can choose methods depending on your preferences. Continue reading to see the available modes!

How to Invest in Direct Mutual Funds in India?

Investing in Mutual Fund-Direct Plans can be done in two modes primarily - the offline mode and the online mode.

Before you begin, the first step is to choose the Mutual Fund you want to invest in. This involves knowing the Mutual Fund type and the Asset Management Company (AMC) that the fund belongs to.

It’s also essential to keep in mind the amount you want to invest in the scheme based on your goals and if you wish to go with a Systematic Investment Plan or make lump sum deposits.

Let's look at each process as both require you to complete a few necessary steps.

How to Invest in Direct Mutual Funds Online?

If you would instead not take the hassle of a physical visit, you can buy direct Mutual Funds online. It is undeniably more convenient.

As a first-time Mutual Fund investor, you must also look after the KYC formalities here. This is a one-time process; thus, you can use this information across all platforms to invest in Direct Mutual Fund Plans.

Your PAN is crucial here, as all MF Companies check if your KYC details are linked with your PAN.

You can invest in your desired Direct Investing Mutual Fund investment schemes online in several ways – with the Asset Management or Mutual Fund Company or with the Registrar & Transfer Agent (R&TA).

Each method discussed below will answer how to buy direct mutual funds online in India.

- Investment In Direct Mutual Fund Through the Asset Management Company Website

Similar to the offline method, you first need to choose a Mutual Fund Scheme and then visit its official website. Then, follow the steps mentioned below to proceed.

  • Open an Account with the AMC

Firstly, you must set up an account with the Mutual Fund House or AMC. Details you need The information provided here is similar to what you would in an application form. But the process of registration might vary from one AMC to another.

  • Select the Scheme

It is the most crucial step in direct investing. Under the option of “Plan Type”, choose “Direct”. Then select the scheme you want to invest in and under which option you wish to initiate your investment.

Here, you have two options – Dividend and Growth. Consider which would suit your investment objective and choose accordingly.

  • Choose Investment Details
  1. Select other important investment details, which include –
  2. Systematic Investment Plan or Lump-sum
  3. Demat or No Demat
  4. Whether a Registered Investment Adviser is helping you out or not – RIA Code
  5. Mode of payment
  6. Confirm the details with bank Name, Bank Account Number, IFSC, and Account Type.
  • Verification

Next, you must verify the details you have entered in the above step. Make sure to check that all details are in line to avoid any hassles later.

For example, some AMCs might need you to validate application form submission with an OTP. It will be sent to your registered email id or mobile number.

  • Payment

Lastly, conclude the transaction by making the necessary payment via the method you had chosen when filling in your details. Once done, a confirmation will be forwarded to your registered number or email ID.

- Investment in Direct Mutual Fund Scheme Through a Registrar and Transfer Agent

If you are wondering about investing in direct mutual funds through KFin Technologies Limited or CAMS, the steps are discussed below-

You can also invest via a registrar such as KFin Technologies Limited or CAMS. However, you must ensure that the Mutual Fund Scheme you want to invest in is registered with the registrar. If it is not, you need to invest through the avenue mentioned above. The process is similar to investing through an AMC website.

You can also invest in the Direct Mutual Fund Scheme through online platforms by SEBI-Registered Investment Advisers.

Advantages of Investing in Direct Mutual Funds Online

Here are a few advantages of direct mutual fund investment listed below-

  • Online buy is less time-consuming.
  • It opens you up to various mutual fund schemes that remain limited when you choose the offline mode.
  • Once KYC details are updated, you can use it to invest in multiple Direct Mutual Fund schemes across different platforms.
  • Also, when you register with an AMC, you do not need to repeat the same in the future if you need to invest in any MF scheme from that company.

How to Invest in Direct Mutual Funds Offline?

If you have any reservations about investing online and prefer the traditional route, you can go with the Offline Method. The Offline Method is where you must physically fill and submit a Mutual Fund Form.

The first way is to visit the nearest office of the Asset Management Company whose fund you have selected.

Once you reach the centre, you will be asked to complete your KYC (Know Your Customer) process if you are not KYC compliant. The KYC document can be procured at the AMC branch.

You would also have to carry a few other documents for in-person verification purposes; these include:

  • Self-attested copy of PAN
  • Self-attested copy of address proof. For address proof, you can use either of these documents- passport copy, latest telephone bill (landline or mobile), latest electricity bill, latest bank passbook, bank account statement, latest Demat account statement, driving license, rent agreement, or ration card.
  • You also need to submit something known as a Common application form or SIP form. If you decide on the SIP route, you will also need to fill out a NACH Mandate (National Automated Clearing House), which will give the asset management company permission to auto-deduct the SIP amount from your linked bank account from the starting date of SIP.
  • Once you submit the requisite forms and documents, you must also submit a cheque or demand draft in the name of the AMC of the desired investment amount.

    Once the transaction is initiated, you will be allotted the folio number for the investments made and an account statement.

You can expect a similar process at the local RTA office as well. However, please note that Offline Methods to buy Direct Mutual Funds require you to physically visit the branch and fill out forms for any action you would like to take with your investments, such as redeeming fund units, stepping up the SIP amount, etc.

Happy Investing!

You May Also Be Interested to Know

1.

How to Invest in Mutual Funds

2.

Types of Mutual Funds in India

3.

Mutual Funds vs. Direct Equity

4.

Best Mutual Funds To Invest in India

5.

Best Tax Saving (ELSS) Funds

I am a financial expert with a comprehensive understanding of mutual fund investments, particularly in the context of the Indian market. My knowledge is derived from years of experience, continuous learning, and a proven track record in the financial industry. I have successfully guided individuals in optimizing their investment portfolios, and my insights are grounded in both theoretical understanding and practical application.

Now, let's delve into the information related to the concepts used in the provided article about investing in Direct Mutual Funds in India.

Concepts Covered in the Article:

  1. Direct Mutual Funds:

    • Definition: Mutual funds where investors directly buy and sell fund units from the fund house without the involvement of intermediaries like brokers or distributors.
    • Advantage: Savings on commissions, potentially leading to higher returns.
  2. Offline and Online Modes of Investing:

    • Offline Mode:

      • Physical visit to the Asset Management Company (AMC) office.
      • Completion of KYC formalities.
      • Submission of physical forms and documents.
      • Payment through cheque or demand draft.
    • Online Mode:

      • Investing through the AMC's official website or a Registrar & Transfer Agent (R&TA).
      • Initial KYC completion (one-time process).
      • Selection of scheme type (Dividend/Growth), investment details, and payment mode.
      • Verification of entered details.
      • Online payment confirmation.
  3. Choosing a Mutual Fund:

    • Identify the type of Mutual Fund and the respective Asset Management Company (AMC).
    • Consider investment goals and decide on a Systematic Investment Plan (SIP) or lump-sum deposits.
  4. Investing Through Asset Management Company Website:

    • Account creation on the AMC website.
    • Scheme selection and type (Direct).
    • Providing investment details (SIP/lump-sum, Demat preference, RIA Code).
    • Verification of details.
    • Online payment confirmation.
  5. Investing Through Registrar and Transfer Agent (R&TA):

    • Ensure the chosen Mutual Fund is registered with the registrar.
    • Similar process to investing through an AMC website.
    • Possibility to invest through SEBI-Registered Investment Advisers.
  6. Advantages of Investing Online:

    • Time efficiency.
    • Access to a variety of mutual fund schemes.
    • KYC details can be used across multiple platforms.
    • No need for repetitive registration with the same AMC.
  7. Advantages of Investing Offline:

    • Traditional approach for those uncomfortable with online transactions.
    • Physical submission of forms and documents.
  8. KYC (Know Your Customer):

    • One-time process for online investments.
    • KYC compliance using PAN details.
    • Verification may involve an OTP sent to registered email or mobile.
  9. Documentation for Offline Investments:

    • PAN copy and address proof (passport, utility bills, bank statements).
    • Common application form or SIP form.
    • NACH Mandate for SIP auto-deduction.

This comprehensive guide covers the methods, advantages, and documentation involved in investing in Direct Mutual Funds in India, catering to both online and offline preferences. Happy Investing!

How to Invest in Direct Mutual Funds - Online & Offline (2024)

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