Mutual fund investment online: from KYC to fund selection — A complete guide

Mutual fund investment online: Investors can opt for offline as well as online methods of investing in mutual funds. However, for beginners, it can be a tricky process. Here is a complete guide of how to invest in mutual funds online.

There are various Asset Management Companies (AMC) that provide investors with various mutual funds to invest in, image- pixabay

Mutual fund investment online: Mutual funds are a popular way of investment among youth as well as senior citizens. With the Systematic Investment Plan (SIP), regular investment can be done smoothly. Investors can opt for offline as well as online methods of investing in mutual funds. However, for beginners, it can be a tricky process. Here is a complete guide of how to invest in mutual funds online:

Choose a platform

There are various Asset Management Companies (AMC) that provide investors with various mutual funds to invest in. Investors should decide which AMC they want to opt for and accordingly take further steps. They should make sure to only opt for AMCs that are listed under AMFI which is the association of all the Asset Management Companies of Securities and Exchange Board of India (SEBI) registered mutual funds in India.

Step-by-step guide to invest in mutual funds online:

Step 1: Open a new account on the trusted AMC website, followed by providing personal information for the investment.

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Step 2: Fill out the Foreign Account Tax Compliance Act (FATCA) form and provide bank information.

Step 3: Upload a photograph of the cancelled cheque along with PAN and Aadhar details for the KYC process

Step 4: The investor’s account will be created, and they can choose the fund they want to invest in

Investing in mutual funds through a Demat account:

Investment in mutual funds can also be done online through a Demat account:

Step 1: Log in to the Demat account and search for the option to invest in a mutual fund.

Step 2: Select an appropriate fund to invest in.

Step 3: Finish the investment by transferring the needed cash online.

Investing in mutual funds through SIP:

To invest in mutual funds through SIP, investors have to enable the SIP auto-debit amount. For that, they first need to choose a fund of their choice and then enable the option. After enabling it, they have to enter details such as their name, phone number, and PAN number, as well as a username and password.

How to choose a mutual fund?

According to Sonam Srivastava, Founder, Wright Research, choosing a mutual fund should be based on investors’ financial goals, risk tolerance, and investment horizon. One must consider the fund's historical performance, but they shouldn’t rely solely on it; they must also look at the fund manager's track record, the asset allocation, and the expense ratio. A diversified fund that aligns with your risk profile can be a good choice.

According to Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, factors that an investor should consider while choosing a mutual fund are:

-Category Selection Strategy: Analyse whether the fund's strategy aligns with your investment goals. Create a diversified basket of mutual funds.

-Futuristic Performance: Understand the future performance potential of the underlying assets in the portfolio.

-AMC Track record: It is always better to opt for AMCs with a stronger track record.

-Fund Manager's Track Record: Assess the track record and expertise of the fund manager. Research their experience, investment style, and ability to navigate different market conditions.

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mutual fund investment Mutual fund SIP