Unlike most financial transactions where all you need is money to complete them, mutual fund investing is possible only when you are KYC (know-your-customer) compliant. This is one of the biggest obstacles when it comes to investing. Over the years, the KYC process has evolved and now you can even undergo an eKYC to start investing.
Besides the KYC compliance, you will need a PAN, address proof and bank account. Recently there is provision for eKYC that has been introduced, where your KYC can be undertaken online with the mandate of using your Aadhaar details. You will need to provide basic details like name, date of birth, bank account details, Aadhaar number, PAN, e-mail, mode of holding and tax status. However, this way, you can only invest up to Rs 50,000 in a financial year in a single AMC. The IPV is being done through online interaction as well, which immensely saves on time and is convenient. Effectively, this route does away with laborious paperwork and facilitates faster processing of KYC compliance for an investor.
The actual investments in mutual funds could be done directly or through intermediaries. When it comes to intermediaries, they can be both offline or online. There are pros and cons in both—when it comes to investing directly, the costs are low, but the onus of fund selection completely rests on you. In contrast, when you invest through an intermediary, there is a degree of hand-holding that goes in, which helps you get a foothold into investing in mutual funds before you can consider taking control of your investments on your own.
KYC Process
1. Documents needed
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- Proof of identity
- Proof of address
- Passport size photograph
2. Fill in KYC form and submit it to a SEBI-registered KYC Registration Agencies (KRAs): CAMSKRA, CVL KRA, NDML, NSE KRA, Karvy KRA
3. Once you have submitted these forms you will have to undergo the mandatory In-Person-Verification (IPV)
4. Check if your application is positive on any of the KRA website to know if you are KYC compliant to start investing
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