After abolishing the entry load for buying Mutual Funds by the RBI, most brokers, these days do not show much interest to sell these assets to prospective investors since their incentives have been scrapped off. The brokers, now, give the option to opt for a ULIP instead of a MF. Try not to buy that advice.
Investing in a ULIP will not give the benefit or the returns as good as a Mutual Fund Investment. But it is certain to take your investments down, if the markets go down, leaving you devoid your savings. In such situations a credit card loan or a personal loan may seem the apt options of raising funds to finance your requirements, but, the situation can get a little nasty, if you do not have enough funds to repay the loan amount.
To avoid all such undesirable situations, these days it is easy to trade your mutual funds online. Although there are certain manual procedures to follow, it can reduce a lot of burden on your pockets since, generally, they are free of cost.
Things to do:
You first download the scheme form from the respective website.
- Fill in your details and submit the same along with the initial cheque, photocopy of PAN card and KYC letter.
- Approach the fund house or collection centers of either of the RTAs (CAMS and Karvy) to submit the application form.
- You also need to apply for a personal identification number (PIN) for online transactions.
- Once you are assigned a folio number along with the PIN, all subsequent transactions in the folio can be done online using your bank account.
The problem that you might face here is that, the repetition of the entire process, except for the KYC, if you wish to possess MFs from other Fund houses. In such situations remembering the 5-8 pin numbers can create a lot of hassles.
Most large brokerages are today linked to the NSE or BSE mutual fund exchange platforms. You will need to log on to the broker’s online trading terminal and select the scheme of your choice from the list of schemes available on the portal. If you have certain orders to place, you can do so by placing orders offline. The units will be credited directly to your demat account.
Your broker may need to activate the MF portal if you are unable to do so. For those who do not wish to make one-time lump sum investments, some brokers also offer online SIP facility.
Since every step is automated, investors do not have to step out of the comfort of their home. In addition, brokers also provide in-house research to help investors identify the best schemes and also allow a consolidated view of all their holdings.