Congratulations on your decision of starting investing in mutual funds. This is surely gonna be one of the wisest decisions that you have ever made. Now coming back to the main point, this is where most of the people get stuck. Based on my experience what I have seen is that most of the people do want to invest in mutual funds, but they are not sure how to start. The procedures available on the web are shown in a much more complicated way than it actually is. The actual process is pretty simple now. Gone are the days when people had to do a lot of paperwork before starting any investment.
Before going further I would like to clear some common doubts that people have regarding Mutual Funds:
Do I need a Demat account to start investing in Mutual Funds?
Absolutely Not! You just need to have your KYC completed with your Mutual Fund provider. However, demat account is required when you want to invest in the share market. On the flip side if you already have a demat account then you don’t necessarily need to do your KYC. You can start investing from your demat account itself.
What are the Platforms/Apps where I can start investing in Mutual Funds?
There are broadly two methods for investing in the mutual fund (excluding demat account holders here):
Method1: Directly visit the website of the mutual fund company (also known as Asset Management Companies, AMCs) in which you want to invest. For example, if you want to invest in an axis bank mutual fund scheme, then go to Axis Bank mutual fund website and register as a new investor.
However, there is a limitation to this method. You can only invest in those mutual fund schemes which are maintained by that particular mutual fund company. Like in the above example, if you have registered with axis bank mutual funds then you can only invest in axis bank mutual fund schemes. If you want to invest in SBI, Franklin, Nippon, HDFC, etc. mutual funds schemes then you have to register with each mutual fund company separately.
This method is suitable for loyal investors who don’t wish to diversify their portfolio and wish to continue investing in one particular mutual fund company. Note that one company may have more than one type of mutual fund schemes. So, even if you have registered with one company you can have a diversified portfolio. For example, if you wish to register with axis bank mutual fund then you have many options to choose from depending on your ambitions and expectations. Some of those schemes are:
- Axis Bluechip Fund
- Axis Liquid Fund
- Axis Long Term Equity Fund
- Axis Midcap Fund, and many more.
All these schemes have their objectives. For example, a bluechip fund has a very different objective from let’s say a liquid fund. We will cover the different types of mutual funds separately as that in itself is a diverse topic.
For now, let’s just understand it with an example of your home appliances. A Television set has a different objective from a refrigerator. You may or may not have a TV and refrigerator of the same company in your house. In other words, a company that produces the best TVs may not produce the best refrigerators. The same case applies to mutual funds as well. The bluechip funds of axis bank may be the best among the contemporary bluechip funds of SBI, HDFC, Franklin, etc. mutual funds, but that doesn’t guarantee that liquid fund, mid-cap fund or other funds of axis bank are also the best among the contemporaries. It maybe be possible that mid-cap funds of HDFC bank are the best performing mid-cap funds and/or SBI liquid funds are the best performing funds among the other contemporary liquid funds. Thus, one should have a diversified portfolio across the different AMCs (Asset Management Companies) as well.
So, if you want to invest across different mutual fund companies then one option is to invest by registering on each mutual fund company website individually.
This may seem to be a tedious process for those who want to have a diversified portfolio across the different mutual fund schemes. The easier option is to follow method 2 in such cases.
Method2: Well! There are many apps available in the market which allow you to invest in multiple mutual funds. Some of them are listed below:
- Paytm Money: Mutual Fund
- Zerodha Coin
- ET Money
- myCAMS Mutual Funds, etc.
All you have to do is complete your KYC details by filling some basic details like your PAN no., your bank statement for the last 6 months, etc.
The KYC completion generally takes 1-2 days and then you are ready to go. For Paytm users, if you have already completed your KYC with Paytm then it will hardly take an hour to get your Paytm mutual fund money app verified after submitting your details.
If you are a guy who falls for interface then I personally feel Kuvera is the go-to app for you. If you want more functionality then you should go for the Coin app. The coin app is run by India’s largest brokerage firm “Zerodha”.
All these apps/platforms are pretty good and you can choose any one of those to start investing in Mutual Funds.
Please share your queries/ feedback below.