- Step-by-step process for buying mutual funds
- Offline method for buying mutual funds
- Online method for buying mutual funds
Before understanding the buying process of mutual funds, it is important for you to have the checklist of documents ready. Following are the documents that you would require to start investing in mutual funds:
1) PAN card
2) Bank account
- You require a bank account with net banking facility for online purchase
For offline purchase of mutual fund, a personalized cheque leaf (cancelled) with IFSC code, MICR code. You can also produce a bank passbook or bank account statement as proof.
3 ) KYC (Know Your Client) documents
KYC (Know Your Client) is a compulsory requirement by the regulator Securities and Exchange Board of India (SEBI) in order to prevent money laundering under Money Laundering Act, 2002.
You need to have your KYC verified with the intermediaries registered with the Securities and Exchange Board of India (SEBI) before starting investing in mutual funds. This mandatory requirement of KYC verification by SEBI is a one time process.
KYC needs to be registered with KYC Registration Agencies (KRA). You can initiate registration with mutual fund distributors, mutual fund houses or directly through KYC Registration Agencies (KRA) online. Following are the KRAs in India registered with SEBI –
- CDSL Ventures Limited (CVL)
- NSDL Database Management Limited (NDML)
- DotEx International Limited (DotEx)
- CAMS Investor Services Private Limited
- Karvy Data management Services limited
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For registration of KYC, you need to keep certain documents ready. Following are the documents required –
- Proof of identity – PAN card/Driving license/ Passport/Voter ID/ Aadhaar card etc.
- Proof of address – Passport/Ration card/Driving license/Bank account statement/lease agreement etc.
- Passport size photograph
Enclose self-attested documents along with filled and signed KYC form. Your documents will be verified in person with the originals.
Step-by-step process for buying mutual funds
If your KYC is not registered, you can also get the eKYC done. You can do it through the online platform of KYC Registration Agencies (KRA) with a few simple steps –
- Visit the website of KYC Registration Agencies (KRA)
- Click on register for eKYC
- Fill in the KYC form
- Input your UIDAI number and mobile number
- Input the OTP (One-time password) received on mobile to verify
- Accept the terms and conditions and complete the process.
Once your KYC is registered or eKYC is done, you can start investing in mutual funds. You have two modes to buy mutual funds – online and offline. Online mode is the most preferred mode to buy mutual funds nowadays than the conventional offline method of buying mutual funds.
Once you decide in which fund to invest in, you can follow the simple process of buying mutual funds mentioned below –
Offline method for buying mutual funds
You can visit specific mutual fund house offices, branches of distributors or brokers to avail mutual fund forms. You can fill in the forms with complete details of investment type (Lumpsum/Systematic investment plan), mode of payment, bank details and holding type. Enclose the payment cheque/demand draft along with the signed form and submit it. You can submit the documents directly at the point of sale of registrars like Karvy or CAMS.
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Online method for buying mutual funds
You can conveniently buy mutual funds online in no time through many platforms. Following are some of the ways to buy mutual funds online –
- Through AMC (Asset Management Companies): You can visit the website of fund houses and start investing your desired choice of funds if your KYC is already verified. There are some fund houses that provide mobile applications for purchasing mutual funds.
- Through Intermediaries: Intermediaries like banks and stockbroking companies offer you an online platform to invest in mutual funds. You can log in to their net banking facility or Demat account facility and follow the procedure of buying online.
- Through online portals: There are many online portals and Fintech companies who are tied up with many AMCs. You can choose a fund of your choice and invest online through their portal.
Read about the benefits of investing in Mutual Funds
Be it any of the ways online, there are some simple steps to follow for mutual fund buying. Following are the processes involved.
- Logon to the website/net banking/online trading account/any online portal
- Follow the process of registration with minimal details needed such as name, date of birth, PAN and mobile number etc. If you are not KYC verified, get the eKYC done.
- If you are already a registered user you can start investing
- Fill in your bank details and nominee details that need to be linked to your mutual fund investment
- Provide your investment details such as type of investment (lump sum/SIP), scheme, and options (growth/dividend), period and the monthly amount for SIPs and any other details required.
- Proceed to make the payment online and complete your buying process.
What to know about different types of Mutual Fund schemes in India? Read the blog to know more