Many of my friends have investments in ULIPs, Pension plans, Life insurance endowment plans, Chit funds, FDs etc. I have a lot of online friends too which are investing in Mutual Funds, Stocks, ETFs, etc. Why is this difference in approach towards investmets?
I think the difference is because there are many agents and even our own relatives who are forcing us to invest in ULIPS, Pension plans and endowment policies, because they are getting hectic commission. But no one is there to direct us towards mutual funds since SEBI banned the entry load for MFs. If you are a fresh investors in Indian Mutual fund, then this article is exclusively for you.
1. How to Select a Best Mutual Fund ?
The first step of buying a mutual fund is to select a good mutual fund scheme, which itself is a tedious job. If you are not able to take a calculated decision, take the help of a good financial advisor. For others my advice is to visit Valueresearchonline.com website. This website is considers as an unbiased mutual fund rating agency.
a.First choose open ended funds
b.Select equity diversified category
c.Select 3/5 year return.
Now we can get a list of the Top 10 funds. From that select the 4 or 5 star rated mutual funds. The good thing here is that these people have done all the hard work to rate the best performing mutual fund. They are rating the funds based on past performance, performance with benchmark, performance with peers, fund manager, advanced portfolio stats and many more. So we don’t have to analyze all the above factors.
2. How to Buy Mutual Funds DIRECT + Online ?
We need to buy and sell MFs through the fund houses like HDFC, Reliance, DSP BR, IDFC, Birla Sun life, BNP Pariba etc. They are called AMCs [Asset Management Company]. Just search the web via Google and find out the website of the selected fund house or AMC.
Now download the MF application forms like
a. SIP form
b. ECS form
c. Online PIN request form etc.
Fill up those forms completely. Don't leave any questions blank, fill up PAN number, Nominee, Bank account number, E-mail ID, Signatures, and even the Bank IFSC code, SIP start date, end date, office telephone numbers etc.
SIP Registration date or SIP starting date = form submitted date + 30 working days.
Also DONT forget to mention the Broker code as DIRECT on top of the SIP enrollment form. If any of your friends have a broker code, put that code so that they will get a trail commision.
Most fund hose have tie ups with CAMS or Karvy which are mutual fund distribution house. In that case you go to the nearest CAMS/Karvy branch and submit the
a)Duly filled Application forms.
b)Crossed check for the first installment
c)Self attested copy of PAN card
Other wise go to the fund house directly. They will immediately return back an acknowledgement receipt. Now with in few weeks you will get an acknowledgement from the fund house with an alloted folio number, and online PIN number.
Don't worry the above steps are just one time hard work with respect to a fund house. With the folio number and PIN number you can purchase / redeem any number of funds with the fund house just by the comfort from our home. Here the main advantage is that we dont have to pay any commision to any broker or Bank for the monthly SIPs and no need of any demat account.
3. How to Buy Mutual Funds Broker + Online?
I am not joking, till now I dont have an online demat account. I always use the offline method to get folio number and then enjoy the online benefits. But now a days, most of the investors have an online demat account and they can buy the mutual funds online. Here are the list of some of the online demat services.
a. Sharekhan,
b. Indiabulls,
c. ICICIDirect,
d. Kotak Securities,
e. SBI Online Demat,
f. Motilal Oswal
Here we can place the MF purchase order, start SIP, stop SIPs online. The major disadvantage here is that we have to pay commission for even monthly SIPs to the broker. Some brokers may avoid commission for high volume investments. So for small investors the offline method will be more suitable.
I think the difference is because there are many agents and even our own relatives who are forcing us to invest in ULIPS, Pension plans and endowment policies, because they are getting hectic commission. But no one is there to direct us towards mutual funds since SEBI banned the entry load for MFs. If you are a fresh investors in Indian Mutual fund, then this article is exclusively for you.
1. How to Select a Best Mutual Fund ?
The first step of buying a mutual fund is to select a good mutual fund scheme, which itself is a tedious job. If you are not able to take a calculated decision, take the help of a good financial advisor. For others my advice is to visit Valueresearchonline.com website. This website is considers as an unbiased mutual fund rating agency.
a.First choose open ended funds
b.Select equity diversified category
c.Select 3/5 year return.
Now we can get a list of the Top 10 funds. From that select the 4 or 5 star rated mutual funds. The good thing here is that these people have done all the hard work to rate the best performing mutual fund. They are rating the funds based on past performance, performance with benchmark, performance with peers, fund manager, advanced portfolio stats and many more. So we don’t have to analyze all the above factors.
2. How to Buy Mutual Funds DIRECT + Online ?
We need to buy and sell MFs through the fund houses like HDFC, Reliance, DSP BR, IDFC, Birla Sun life, BNP Pariba etc. They are called AMCs [Asset Management Company]. Just search the web via Google and find out the website of the selected fund house or AMC.
Now download the MF application forms like
a. SIP form
b. ECS form
c. Online PIN request form etc.
Fill up those forms completely. Don't leave any questions blank, fill up PAN number, Nominee, Bank account number, E-mail ID, Signatures, and even the Bank IFSC code, SIP start date, end date, office telephone numbers etc.
SIP Registration date or SIP starting date = form submitted date + 30 working days.
Also DONT forget to mention the Broker code as DIRECT on top of the SIP enrollment form. If any of your friends have a broker code, put that code so that they will get a trail commision.
Most fund hose have tie ups with CAMS or Karvy which are mutual fund distribution house. In that case you go to the nearest CAMS/Karvy branch and submit the
a)Duly filled Application forms.
b)Crossed check for the first installment
c)Self attested copy of PAN card
Other wise go to the fund house directly. They will immediately return back an acknowledgement receipt. Now with in few weeks you will get an acknowledgement from the fund house with an alloted folio number, and online PIN number.
Don't worry the above steps are just one time hard work with respect to a fund house. With the folio number and PIN number you can purchase / redeem any number of funds with the fund house just by the comfort from our home. Here the main advantage is that we dont have to pay any commision to any broker or Bank for the monthly SIPs and no need of any demat account.
3. How to Buy Mutual Funds Broker + Online?
I am not joking, till now I dont have an online demat account. I always use the offline method to get folio number and then enjoy the online benefits. But now a days, most of the investors have an online demat account and they can buy the mutual funds online. Here are the list of some of the online demat services.
a. Sharekhan,
b. Indiabulls,
c. ICICIDirect,
d. Kotak Securities,
e. SBI Online Demat,
f. Motilal Oswal
Here we can place the MF purchase order, start SIP, stop SIPs online. The major disadvantage here is that we have to pay commission for even monthly SIPs to the broker. Some brokers may avoid commission for high volume investments. So for small investors the offline method will be more suitable.
ICICIDirect has bug in their software. You will not be able to buy Mutual funds online if you are joint account holder on saving account & demat account.
ReplyDeleteHI I am yet to start investment. So my question might be trivial..but kindly answer me.
ReplyDeleteAfter getting folio number and PIN using direct + online method, how you are going to use online method to pay for SIPs? Is that from your internet banking account?
Could you kindly write how an NRI can start investing in MFs in India?
Once you get the Folio number and PIN number you can log into the Fund house website, say for HDFC, you can use the following link. https://investor.hdfcfund.com/mfonline/
ReplyDeleteThere we need to Fill up the following SIP registration details:
Scheme
SIP frequency
Installment amount
SIP date
Month in which the 1st installment should be processed
No. of installments (SIP end date will be calculated and displayed)
Broker code, if any
Then the SIP confirmation page will be displayed. To change any details, click on EDIT. Check for correctness and click CONFIRM.
Upon clicking CONFIRM, a summary page will be displayed mentioning the Transaction Number and the SIP Registration Number (SRN).
For payment of SIP installments:
In order to complete your SIP registration with your bank, please log on to your bank’s net banking facility and register for auto debit instructions of your SIP installment directly from your account. There select the auto-payment/biller option.
Please select HDFC Mutual Fund as your biller.
Please input the SIP Registration Number (SRN) in the field requesting the Biller Reference Number.
From the SIP Starting date onwards the amound would be debited from your internet bank account.
Thank You GN.
ReplyDeleteThese are some excellent Tips, but in brief I will say, that You must select funds with a consistent performance track record, which is a function of the sound investment processes and systems followed by the fund house.
ReplyDeleteThanks for these tips
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