Invest online for faster growth of your investments

The advancement in technology has made it possible for anyone with internet connectivity to invest in mutual funds with few clicks. However, there are some perquisites that you need to consider, including that you should be KYC compliant. Investing online (not necessary) will help you to buy direct schemes of mutual funds. For the novice, mutual fund scheme generally has two options one direct and other regular. In case you buy regular fund generally through mutual fund advisers or brokers, you need to pay some intermediary charges that are inbuilt in the expense ratios and net asset values (NAV). However, if you go for a direct plan, you do not have to pay any intermediary charges. You buy directly from mutual fund companies through their respective portals, mutual fund utility (MFU) or few online portals which offer such direct mutual funds on their platform.

This intermediary charge in terms of expense ratio, though, is as low as 1%, however, it becomes bigger as time elapses. This is reflected in the difference between NAV of direct and regular plans. The direct plan will have its NAV higher than a regular plan due to their better performance. There are various online platforms that will help you to invest online in mutual funds.

Mutual Fund’s Website

One of the easiest ways to invest in the direct fund is through the portals of mutual funds. For example, if you want to invest in any one of the funds managed by SBI MF, you can visit their website and invest directly. Nonetheless, you need to be KYC compliant before initiating any transaction. Transactions through these sites are free.

Registrar and Transfer Agents ( RTAs )

RTAs are institutions formed to register and maintain detailed records of investor’s transaction on behalf of mutual fund houses and for their convenience. CAMS and Karvy are the two primary RTAs. You can use their portal to buy direct schemes. However, they do not provide services to all AMCs. You can buy a direct plan of only those mutual fund houses to whom they provide services. For a complete list of mutual fund companies to whom they service you can visit their site.

MF Utility

Another free platform from where you can buy a direct plan, is MF utility (MFU). It is a shared infrastructure of the AMC in India to reduce duplication and increase efficiency, thereby, reducing costs and provide customer convenience. Not all AMCs are part of this, however, most of the AMCs , i.e., more than 90 per cent of the asset under management are part of this initiative.

Online Platform offered by SEBI Registered Investment Advisors (RIAs)

In addition to the above options, there are some online platforms offered by SEBI registered investment advisors (RIAs), through which you can buy direct plans. However, they are not free and charge you depending on your transactions.

Therefore, if you want your money to grow faster, it is advisable to select direct plans of any mutual fund scheme. You can buy direct plans from any of the above-mentioned ways. However, we recommend using the respective portals of mutual fund companies or RTAs.