Investment in Mutual Funds in India – How to do it offline and online ? What is KYC ? How can I do my KYC? Which Mutual transactions are permitted online?
We are living in an era where we can buy almost everything Online. We can order food online, pay our bills online and book movie ticket online. Yes, now most of the financial products can also be purchased online. But there are certain conditions like Know Your Customer (KYC) to be completed before we can transact online.
Know Your Client (KYC) – What is it?
It is a mandatory condition to invest in any financial product. It is nothing but submission of your Identity Proof, Address Proof etc. You can submit PAN Card, Passport, Driving Licence etc as Identity Proof.
Where can I do my KYC?
AMFI has created a centralised platform through CDSL Ventures Limited (CVL) to carry out the KYC procedure on behalf of all Fund Houses. CVL through its Point of Service (POS) will accept KYC application form, verify the documents and provide the KYC acknowledgement. The list of POS can be obtained from the website of AMFI and Mutual Funds.
If you are investing for the first time in Mutual Funds, the Agent/Broker will collect your documents and do the KYC for you. But if you plan to invest in Direct Plan, he may not do it for you.
Once you have done the KYC, you can invest across any Fund House. You should attach a copy of the KYC acknowledgement when you invest for the first time with a Fund House.
Investment in Mutual Funds – Offline
Once you get the KYC acknowledgement, investment in Mutual Fund is very easy. Just fill up the Application Form of the Scheme and submit it along with the cheque for the amount. You should also attach the copy of your PAN Card and a Cancelled Cheque for verifying the bank account details.
If you are opting for SIP, you have to give the cheque for the first month and from the next month; the amount will be deducted by ECS on the selected date. This is the simplest way for equity investments for long-term goals.
Investment in Mutual Funds – Online
If you want to invest online, first you should get a Folio Number by investing in the Offline mode. Once you have the Folio Number, you can visit the website of the Fund House and download the Form for applying for a PIN. Some Fund Houses will allow you to apply for PIN online, while in other cases, you have to send the Application by Courier/Post. Once you get the PIN, you can transact online.
Some Fund Houses are now allowing you to invest Online without a Folio Number. In that case, you have to download the Forms and send it to them.
How to Start Investment in Mutual Funds Online?
Download the Application Form of the Scheme you want to invest in from the Mutual Fund website. Fill it up and send it to the Fund House branch or at the CAMS /Karvy office along with DD or cheque favouring the Scheme. Please attach a copy of your PAN Card and a Cancelled Cheque along with the KYC acknowledgement. You will receive the account statement from the Fund House with the Folio Number.
Then download the application for PIN from the website of the Fund House and fill it up with your folio details. Send it to the Fund House for creation of PIN. You will get your PIN number. Some Fund Houses are allowing you to create a PIN online. After receipt of your PIN number, you can transact online.
Which Transactions are Permitted Online?
Once you are having a PIN, Folio Number and your Mobile Number and Email Address is registered with a Fund House, you can do the following Online:
- Buy any Fund from the same Fund House.
- Switch among various Schemes of the same Fund House.
- Redeem Units and get the amount credited to your bank account.
- View and download account statements from the website.
- Transactions like SIP, STP or SWP.
You will get email/mobile confirmation after each transaction to ensure safety of the transactions.
This is a Onetime process and if you activate this with each Fund House, you can do all future transactions online. You need not run after the Agent for any service issues. But first ensure that you have an Online Banking facility.
What do you think is a better way of “investment in mutual funds” – Online or Offline?