Following last year’s demonetisation drive, e-wallets gained prominence as a mode of transaction among millions of people. The ease of cashless transaction and the convenience of making payments remotely have drove wallet usage higher though things have returned to normal after the end of the note ban. Promotional discounts and cashbacks added to the charm of using wallets. According to a report by NITI Aayog, the number of transactions per day through e-wallets grew from 17 lakh to 63 lakh within a month after the demonetisation.
And now the Securities Exchange Board of India (SEBI) has allowed the use of e-wallets in making investment in Mutual Fund schemes. This was done in a move to promote digital payment and channelise investment into the capital market. This has certainly made purchase of these instruments easy.
How to invest using e-wallets
Investing through e-wallets is relatively simple. You can do so by following the steps below:
- If you are a new user, download an e-wallet app on your mobile phone, register yourself and create an account. The registration can be done by providing your full name, mobile number and email id.
- If you are an existing user, you can move to the next step.
- Transfer money into your e-wallet account as the investment amount will be deducted from the balance available. The money can be loaded through your debit card or net banking account.
- After you have loaded money in your account, you can start making investments. In your e-wallet interface select ‘investments’ or ‘Mutual Funds’ to start investing.
Investing through e-wallets in easy. However, you must keep the following in mind:
- Money loaded in your e-wallet account through Credit Cards or any cashback schemes would not be allowed for subscription.
- The maximum you can invest through an e-wallet is up to Rs.50,000 in a year.
- No cashback or discounts are offered on investment in Mutual Funds.
- At the time of redemption, the amount is credited to your registered bank account. It is not credited back to the e-wallet.
- Instant online access facility is also allowed for liquid Mutual Funds. The upper limit for these funds is Rs.50,000 or 90% of the value of the investments, whichever is lower. These payouts are valued at the last day’s Net Asset Value (NAV) or the prospective NAV, whichever is lower.
Many not-so tech savvy investors have had to learn digital transacting in the last few months. With more initiatives like these, digitisation is going to play a large role in economic democratisation.
Additional Reading: Learning To Use E-Wallets Safely