Achieving financial freedom is usually not the priority of young people, but, one should always start investing early on in life to achieve financial freedom and gain a sense of financial security.
Mutual funds are the best investment vehicle to start with, as they allow one to invest across asset classes according to one’s needs with the help of a professional fund manager.
There are two investing options available for investing in mutual funds – regular and direct plans. If you plan to invest through a broker or an investment advisor, you can buy the regular plan, where the expense ratio will be slightly higher compared to that in a direct plan. If you invest in a direct plan, you can invest through an online platform, or the fund house directly, and you will be paying a lower expense ratio.
How To Invest With A Mutual Fund House Directly
The first step to start your investing journey is to decide the scheme. Once you have selected the mutual fund you want to invest in, you can visit the mutual fund’s office or their registrar’s office and invest in the scheme of your choice.
Get KYC Done
To invest in a mutual fund, you need to be ‘know-your-customer’ (KYC) compliant. If you are investing for the first time, you need to carry some documents with you for the KYC process. The documents include self-attested copy of your Permanent Account Number (PAN), Aadhaar card or any other address proof, such as voter id, driving license, along with passport-size photographs.
You will have to fill out an application form and submit an address proof, identity proof, cancelled cheque and photographs.
The benefit of going directly to the mutual fund's office is that you can get the central KYC (CKYC ) process completed.
Once KYC is done, you can start investing on your own either by visiting the mutual fund’s website or their registrar’s website.
You will need to enter your PAN and date of birth, and create a folio. Once you have created your folio, you can start investing by making payment through the Unified Payment Interface (UPI) or Netbanking. You cannot make payment through credit or debit card.
Through Fund House’s Website Or Application
You can also go the mutual fund’s website and complete the e-KYC process by submitting copies of your self-attested address proof, identity proof, PAN, and photographs.
Once you complete the e-KYC process, you will be notified of the same on your registered mobile phone and e-mail address.
Investing Through A Broker Or Investment Advisor
If you cannot track the market and do not know which mutual fund can generate better returns in the coming years, then you can take the services of a broker or investment advisor, who can guide you through the investing process.
When you invest through a mutual fund distributor, you invest in the regular plan. The expense ratio of a regular plan is higher than that in a direct plan. The extra fee that you pay can be justified if the broker or advisor can generate high returns on your investment .
Online Platforms
You can also invest through online mutual fund platforms. If you can properly pick the mutual funds, then these platforms can be the one-stop shop for your mutual fund investments.
