How To Invest in Mutual Funds?

A lot of investors want to invest in mutual funds to create a wealth corpus but do not know the avenues of those investments. Beginners also lack the information of what documents are required, or what is the process for investment in mutual funds. In this article, we aim to explain several online and offline options available for investments in mutual fund schemes.

Ways to Invest in Mutual Fund Schemes

Investors need to decide the category and the type of funds they wish to invest in. They must evaluate their own investment goals, time horizon, and risk tolerance to decide on the category and the sub-category of mutual funds. Then, they can do some research on various schemes from different Asset Management Companies (AMCs) to choose which scheme to go for. You can invest in a fund scheme in the following ways!

How to Invest Online through Paytm?

Paytm is a digital wallet, dedicated mobile app specifically for payments and recharges. You can invest in stocks and mutual funds through Paytm Money. You can log on to your Paytm app and go to the ‘All Services’ icon to browse through the ‘Stocks and IPO’ section. As you click on ‘Mutual Funds’, it will redirect you to open the Paytm Money app or open it on a browser.

Paytm Money has no hidden charges, fund schemes are rated by reputed agencies, and you can compare the fund performances along with the portfolio insights. It has a hassle-free account opening process and you can invest in a handful of schemes for free. Follow the below steps:

  • Download the ‘Paytm Money’ app and log in with your Paytm account. Enter the OTP you receive on your mobile number
  • Here, you can invest in both stocks as well as mutual funds for zero commissions and brokerage. You can also invest in NPS, explore ‘Future & Options’, and download advisories on how to build ‘WealthBaskets’
  • Click on the ‘Mutual Funds’ section where you have several types of schemes like – Tax saver funds, top-rated funds, funds with best returns, etc. You can also go through ‘Investment Ideas’ to have an insight if you are a beginner
  • Top-rated funds contain the fund ratings by the Morning Star and Value Research. Similarly, funds with the best returns display a list of best-performing schemes in each category like equity, hybris, tax-saver, and debt
  • All fund schemes contain detailed information like NAV, fund managers, performance, returns, and other funds in the same category for investors to compare. You have both the fund information and the AMC information along with the scheme documents to have details of asset allocation and a summary of the same. It is also advised that you check the riskometer and the minimum SIP amount before investing

How to Invest through Demat Account?

Demat account is usually required for stocks and not mutual funds. However, if you have one, you can invest through a Demat account as well. You can open an offline Demat account either through a broker or by visiting the AMC of the scheme in which you plan to invest. All you need to do is give identity and residential proof along with bank details for KYC verification. You may have to add some amount in the Demat account initially to get a folio number along with the PIN.

You can also open your Demat account online through e-KYC on various platforms. Use the Paytm app or the Paytm Money that will lead you to the Paytm Mini Store for KYC verification. On the Paytm Money app, click on ‘Stocks’ and you will be redirected to the KYC verification page. However, on the Paytm app, you have to follow the below steps:

  • Log on to your Paytm app, scroll down to the ‘All Services’, and click on ‘Stocks & IPO’
  • Now, you can either go to ‘Paytm Stocks’ or ‘Free Stocks Account’ where you can complete your KYC to create a Demat account. Alternatively, if you choose other options like ‘Mutual Funds’ or ‘Save Taxes’, you will be redirected to Paytm Money where you can open a Demat account as well

How to Invest through AMC/Fundhouse?

Most of the fund houses or AMCs have an online site/app where you can create an account as an investor using an email id, phone number, or PAN card. You will undergo a KYC process and once verified, you can invest in plenty of their schemes.

If you wish to go for an offline process, you may have to visit the AMC branch and submit the mutual fund application form along with self-attested identity and address proofs. Also, attach passport size photographs and PAN card information for KYC verification.

How to Invest through a Broker?

A broker will invest in mutual funds directly through AMC online or offline on your behalf. They may open your Demat account as well and will charge for the same. Brokers not only help in account opening or KYC but also advise about schemes and investments as they keep a track of them. However, they come with their charges such as managerial and operational fees.

Wrapping it up:

You can invest in mutual funds directly through AMCs in an online or offline process. Brokers and third-party mutual fund investment apps are also available. Brokers will charge a fee while fund houses/AMCs will inform the investors only about the schemes that are launched by them. On the other hand, third-party apps contain funds from various AMCs. Paytm Money, not only has several schemes by various fund houses but also contains all the details of a portfolio. It also has a quick and easy process of e-KYC such that investors can conveniently start mutual fund investments. You can invest in lump sum as well as through SIP and enable auto-pay.

How to invest in mutual funds without a Demat account?
You do not need to have a Demat account for mutual funds and you can invest online/offline through AMCs or brokers and online via investment apps, for instance, invest in MF schemes through Paytm Money for free.
How can I invest in mutual funds on a monthly basis?
Mutual fund investments can be of two types – lumpsum investment and monthly investment through Systematic Investment Plans (SIPs). You can invest via SIPs in small amounts on a monthly basis.
How to save tax through mutual funds?
You can invest in tax-saver funds which are ELSS (Equity Linked Savings Scheme). They are equity funds that come with a monthly mode of investment (SIP).
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