How To Invest in Mutual Funds?

How To Invest in Mutual Funds?

A lot of investors want to invest in mutual funds to create a wealth corpus and to focus on goal based investing 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

The first step to begin investing in mutual fund schemes is to open an account. Once you are done with this, you must evaluate your own investment goals, time horizon, and risk tolerance to decide on the category and the sub-category of mutual funds. Then, you can do some research on various schemes from different Asset Management Companies (AMCs) to choose which scheme to go for. You must also decide the category and the type of funds that you wish to invest in.

The multiple ways in which you can invest in a fund scheme are explained in the blog below!

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 offers fund schemes that are rated by reputed agencies, allows you to compare the fund performances along with the portfolio insights if you already an investor. It has a hassle-free account opening process and you can invest in a handful of schemes for free and at absolutely no hidden charges.

Follow the below steps to invest online through Paytm:

  1. Download the ‘Paytm Money’ app and log in with your Paytm account. Enter the OTP you receive on your registered mobile number on Paytm
  2. Here, you can invest in mutual funds, stocks, NPS and explore ‘Future Options’, and download advisories on building outperforming stock and ETF portfolio through WealthBasket’
  3. Click on the ‘Mutual Funds’ section and discover direct mutual funds for investments. You can explore funds grouped by best returns, top ratings, fund categories, AMCs, fund managers etc. You can also explore investment ideas for your ease of selection of funds.
  4. All fund schemes contain detailed information like NAV, fund managers, 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 can also open your Demat account online through e-KYC on various platforms. Use the Paytm or the Paytm Money app that will lead you to the Paytm Mini Store for KYC verification. On the Paytm Money app, simply click on the ‘Stocks’ option and you will be redirected to the KYC verification page. However, on the Paytm app, you have to follow the below steps:

  1. Log on to your Paytm app, scroll down to the ‘All Services’ section, followed by clicking on ‘Stocks & IPO’
  2. If you choose other options like ‘Mutual Funds’ or ‘Save Taxes’, you will be redirected to the Paytm Money app where you can open a Demat account as well
  3. Alternatively, you can also go to ‘Paytm Stocks’ or ‘Free Stocks Account’ where you can complete your KYC to create a Demat account

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 might 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 has various direct mutual fund schemes by several fund houses which you can explore, invest and track seamlessly. It also has a quick and easy process of e-KYC such that investors can conveniently start mutual fund investments. You can invest one time invest (lumpsum) or invest monthly through SIPs.

FAQs

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.

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 ELSS (Equity Linked Savings Scheme) mutual funds, which are also known to be tax-saving funds. These are equity funds that offer a monthly mode of investment (SIP). Note that the provisions of Section 80C of the Income Tax Act, 1961, allows you to claim tax deductions of up to Rs 1,50,000.

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