Section 9 – How You Can Start Investing In Mutual Funds

Table of Contents

How you can start investing in Mutual Funds

All investors can invest in any scheme barring a few schemes wherein only specified types of investors can make investment. For example, some Gilt schemes have specified that only PF Trust, Superannuation, Gratuity or Pension Funds, Religious and Charitable Trusts can invest.

Fresh purchase of units in a scheme can be made during the new fund offer (NFO) period or even after that in an open-ended scheme. To make an investment, an investor is required to fill the application form of the scheme with all required documents and amount of investment. Investors are required to complete the prescribed documentation process in tune with the Key Information Memorandum (KIM). Thereafter, the mutual fund will allot a folio in favour of investor.

The process of mutual fund investment is simple, investor friendly and can be done offline or online mode. All you need to do is to –

1. Analyse and understand the future financial needs and investment objective

2. Decide the route of investment whether online or offline

3. Select the most appropriate scheme matching to your investment objective

4. Complete the KYC process

5. Submit the Common application Form/ SIP form along with subscription amount to the respective intermediary/AMC/RTA if you choose the offline mode OR an appropriate online platform/ Portal of Asset Management Company/ RTA for online mode.

Know Your Customer (KYC) Guidelines and how to do it

KYC stands for “Know Your Customer”. The Reserve Bank of India has made it mandatory for banks, financial institutions including Mutual Funds and other organizations to verify identity and address of all customers who carry out financial transactions with them. KYC is a process through which an institution verifies the identity and address of an individual.

 A customer has to submit his KYC before he starts investing in various instruments such as mutual funds, fixed deposits, bank accounts, etc. But an individual has to do it only once when he starts investing for the first time.

The KYC process can be carried out online as well as offline at any of the SEBI registered KRA (KYC Registration Agency) or AMC offices of the mutual fund houses.

KYC Registration Agency (KRA) are CAMS, Karvy, CSDL (Central Depository Services Limited) Ventures, NSDL (National Securities Depository Limited) and NSE-owned (National Stock Exchange) DotEx International Limited.

  • Online KYC process for Mutual Fund Investments

KYC can be completed on websites of most of the Mutual funds/ KYC registration agency (KRA). But before clicking on the website, one should be ready with the following self-attested documents –

  • Image of Pan
  • Image of address proof (Aadhar / Voter ID/ Passport etc.),
  • Image of sign and
  • Image of cancelled cheque.

Follow the given steps-

Step 1

Log on to the website of any KYC Registration Agency and create an account

Fill online form including details of your pan, your registered mobile number, identity and address proof document, and bank details

Step 2

Upload self-attested documents as mentioned in the KYC form

Step 3

Complete the in-person verification through video call or by visiting KRAs office in person. IPV KYC is done through video call also where you have to display the original identity and address proof during the video call.

  • Off line KYC process for Mutual Fund Investments

You can get the KYC done offline also. You can download the forms from the following link: https://www.amfiindia.com/know-your-customer

Please fill up the downloaded form, attach following documents with it and submit to the office of AMC or RTA –

  • Latest photo
  • Copy of Pan card
  • Copy of address proof
  • All these documents should be self-attested.

Follow the given steps-

Step 1

  • Download and fill the KYC form. Mention your identity and address details
  • Attach the proof of identity and proof of address with the application

Step 2

  • Visit a KRA office and submit the application. Complete the Verification/ biometrics as well when required.
  • After completing the process KYC acknowledgement will be issued to the customer.

WAYS TO INVEST IN MUTUAL FUND

Offline investment in Mutual Fund

Offline investment can be done by following these steps-

Step1

The KYC is a must as all investors before starting the investment. Therefore, complete the KYC. To complete the KYC, you need to complete the process in the KYC section above. Submit a cancelled cheque for bank details.

Step 2

Fill in the Common Application Form / submit it to the office of the AMC / Registrar and Transfer Agents (RTAs). Form can be obtained from the fund house or downloaded from the website.

Step 3

You have to provide a bank mandate form mentioning all your SIP details for regular payment if investing through SIP.

Online investment in Mutual Fund

Step 1

Primarily you need to visit the website of KYC registration agency online and get the KYC done. It is important to check that the KYC registration agency services are available to the fund of your choice. Many Mutual Funds are also providing eKYC facility on their website. Follow the steps and procedure shown in the website for this purpose.

Step 2

After completing the KYC verification create a transaction account with the fund house. Login the account and submit your subscription request to start a lump sum investment or SIP of your choice.

To do this-

  • Go on the website of the fund house that offers the scheme or portal of authorized intermediary.
  • Register yourself and create a user ID and password to carry the further transactions online
  • Provide the details of the bank account from which the SIP payments will be debited.
  • After getting confirmation from the fund house, you can start investing either lump sum or in SIP scheme.
  • Demo KYC application Form
  • Demo Common Application Form
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