How to invest in mutual funds online in India

Last updated: February 19th, 2018

how to invest in mutual funds online in India

Do you want to invest in mutual funds but don’t know where to start? Well, mutual funds are available online and you can easily start investing in them without any hassles.

I have listed out 5 simple ways you can invest in mutual funds online.

If you have never invested in mutual funds before (or had last invested before 2011), you will have to complete your KYC. Most of the ways listed below also have the option of eKYC, through which your KYC will be done online without much paperwork.

How to Invest in Mutual Funds Online

1. Invest directly through websites of the fund houses

Most mutual fund houses have an option of online investment through their websites and that is probably the first option you can think of. You need to create an account with them on their website and then you can start investing online. The account opening process varies across fund houses.

Pros

1. Investment is directly through the fund house, so no third party is involved.

2. Simple process.

3. You can invest in direct plans of mutual funds, which can give you slightly better returns in the long term.

Cons

1. You need to open accounts with multiple funds houses for investing in various mutual funds.

2. Invest through MyCAMS for CAMS serviced funds

CAMS is one of the registrars of mutual funds in India (the others being Karvy, Sundaram, Franklin). All mutual funds have registrars (Registrar and Transfer agents, or R&T agents). They handle all the paperwork and maintain records of all transactions of investors for the mutual fund houses.

CAMS offers online investment facility for funds that are serviced by them. The account opening procedure is simple, and once your account is open you can invest online.

The list of mutual funds currently serviced by CAMS are:

1. Birla SunLife Mutual Fund

2. DSP Black Rock Mutual Fund

3. HDFC Mutual Fund

4. HSBC Mutual Fund

5. ICICI Prudential Mutual Fund

6. IDFC Mutual Fund

7. IIFL Mutual Fund

8. Kotak Mahindra Mutual Fund

9. L&T Mutual Fund

10. Mahindra Mutual Fund

11. PPFAS Mutual fund

12. SBI Mutual Fund

13. Shriram Mutual Fund

14. Tata Mutua Fund

15. Union Mutual Fund

Pros

1. Simple process

2. You can invest in direct plans of mutual funds, which can give you slightly better returns in the long term.

3. You can view your investments in one place so it is easier to keep track.

4. You can also redeem, switch, make additional investments, set up SIP, STP or SWP for all your funds through a single interface.

Cons

1. You can invest only in CAMS serviced funds. For mutual funds not serviced by CAMS, you will need other ways of investing.

Create your MyCAMS account now and start investing in CAMS serviced funds.

3. Invest through MF Utilities

MF Utilities is a single window platform developed by the Association of Mutual Funds in India (AMFI) for transactions across all Mutual Funds.

Currently, there are 29 participating AMCs and you can invest in the mutual funds of these AMCs online through this portal.

Once you open an account, you will be allocated a CAN number. The account opening can be done online if you opt for eCAN.

Online access is not enabled by default. After your eCAN number is approved, you have to send an email to clientservices@mfuindia.com and ask for online access to be enabled.

Once online access is enabled, you can start investing in mutual funds online.

Here is a list of mutual funds available through MF Utilities:

1. Axis Mutual Fund

2. Birla SunLife Mutual Fund

3. BNP Paribas Mutual Fund

4. Canara Robeco Mutual Fund

5. DHFL Pramerica Mutual Fund

6. DSP Black Rock Mutual Fund

7. Edelweiss Mutual Fund

8. Essel Mutual Fund

9. Franklin Templeton Mutual Fund

10. HDFC Mutual Fund

11. ICICI Prudential Mutual Fund

12. IDBI Mutual Fund

13. IDFC Mutual Fund

14. IIFL Mutual Fund

15. Indiabulls Mutual Fund

16. Invesco Mutual Fund

17. Kotak Mahindra Mutual Fund

18. L&T Mutual Fund

19. Mahindra Mutual Fund

20. Motilal Oswal Mutual Fund

21. PPFAS Mutual Fund

22. Principal Mutual Fund

23. Quantum Mutual Fund

24. Reliance Mutual Fund

25. SBI Mutual Fund

26. Sundaram Mutual Fund

27. Tata Mutual Fund

28. UTI Mutual Fund

29. Mirae Asset Mutual Fund

Pros

1. Simple process

2. You can invest in direct plans of mutual funds, which can give you slightly better returns in the long term.

3. You can view your investments in one place so it is easier to keep track.

4. You can also redeem, switch, make additional investments, set up SIP, STP or SWP for all your funds through a single interface.

Cons

1. You can invest only in funds of the 29 participating AMCs. For mutual funds of other AMCs, you will need other ways of investing.

Create your MF Utilities account now and start investing in mutual funds.

4. Invest through your Demat account

If you invest in stocks, or already have a demat account, you can also invest in mutual funds through that account. However, your investments would be subject to transaction fees charged by the broker.

If you do not already have a demat account, you should not open one just to invest in mutual funds. You can easily buy mutual funds online without demat account. Just use any of the other methods given here.

You should only open a demat account if you want to invest in stocks.

Pros

1. All you stocks and mutual fund investments would be in one place, so it would be easy to track and manage.

Cons

1. You need to pay high fees as your transactions would be subjected to brokerage

2. You need to pay annual maintenance charges for your demat account.

3. The account opening process is lengthy and involves a lot of paperwork.

5. Invest through Online Mutual Fund Investment Platforms

There are many independent, third party online mutual fund investment platforms through which you can easily invest in mutual funds.

Most of these platforms have a simple sign up process. Once you sign up and open an account with them, you can invest in mutual funds of almost all the fund houses.

They also have advisory services free of cost; so if you are not sure which mutual fund would be suitable for your needs, you can contact them. You can also design your portfolio based on your needs.

There are two types of online platforms – a) Regular investment platforms and b) Platforms which allow investment into direct funds.

a) Regular mutual fund investment platform

These platforms are the online version of the mutual fund agents or brokers.

The portals are free to use and you can invest in regular plans of any mutual fund of your choice. You can also get free advisory from them.

Funds India, Funds Supermart and Scripbox are examples of such portals.

They don’t charge anything for using their portal. Instead, they make their money through mutual fund trail fees (trail fees are paid by all mutual fund houses to their agents).

I have been investing with Funds India since 2012 and am very happy with their services.

Pros

1. Simple process

2. You can invest in any mutual fund of your choice whenever you want.

3. All your mutual fund investments at one place, so it is easy to track.

4. You can also redeem, switch, make additional investments, set up SIP, STP or SWP for all your funds through a single interface.

5. One account for all your investments, so no need to remember multiple login IDs and passwords.

6. Quick customer service

7. Free advisory services.

Cons

1. You cannot invest in direct plans. For long term investments (say 7-10 years or more), this can be a drawback as your returns might be lower by 1-2%.

Create your FundsIndia account now and start investing mutual funds of your choice.

b) Platforms which allow investment into direct funds

These platforms let you invest in direct plans of mutual funds, but they charge a fee for their service.

The fee varies for the different portals. Some charge a flat fee while others charge according to your portfolio value or on a per transaction basis. It is usually not very high.

Since you can invest in direct plans through these portals, you can easily offset these fees by the gains made for long term investments.

BharosaClub, ClearFunds, Kuvera, Zerodha Coin are a few examples of such portals.

Among them, Kuvera does not charge anything while allowing you to invest in direct plans. They make money through other means.

Pros

1. Simple process.

2. You can invest in any mutual fund of your choice whenever you want.

3. You can invest in direct plans of mutual funds, which can give you slightly better returns in the long term.

4. All your mutual fund investments at one place, so it is easy to track.

5. You can also redeem, switch, make additional investments, set up SIP, STP or SWP for all your funds through a single interface.

6. One account for all your investments, so no need to remember multiple login IDs and passwords.

7. Quick customer service

8. Advisory services.

Cons

1. You need to pay some fees for using the services of these portals.

My approach

I use Funds India for all my short and medium term investments. All my debt mutual fund investments and some equity SIPs are through them. They have a very easy to use portal which makes managing my investments simple.

For my long term investments (for e.g. my daughter’s education, retirement), I invest in direct plans of equity funds through the websites of the respective fund house or through MyCAMS or MF Utulities account.

Conclusion

Mutual funds are one of the best investment options available, especially for new investors. They are professionally managed and highly regulated, so you don’t have to worry about your money falling into wrong hands.

It is very easy to invest in mutual funds online. You can use any of the ways I have mentioned above to invest in the mutual fund of your choice. All the methods have their own advantages and disadvantages, so try out the one you feel comfortable with and begin your financial journey.

So start investing today, and let your money grow. Happy investing!

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