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
Indian fund managers are currently facing a problem of plenty. With money flooding into their funds as retail investors are pouring money into mutual funds attracted by benchmark indices hitting new highs every other day. This appears to be a positive development but the risks are clear. Your thoughts?
Hi Priyanka Kumari,
We totally agree that the risks are higher for Mutual Fund investors. Fund managers have to find investments at attractive valuations to provide the best returns for investors. Finding reasonably valued stocks and fixed income investments in the present market is not easy. Deploying the cash received as soon as possible is very important too. So, we could say the fund managers will need to have top notch research skills to make good investments in this market. So, choose funds that are run by the best fund managers.
Cheers,
Team BankBazaar
I want to invest in Mutual Funds and want assured returns. I’m buying a bike and it cost me very much. I want mak extra money to buy expensive helmet and accessories. Which fund you suggest?
Hi Shivanka Nopantmani,
While we do provide general tips and advice on personal finance, we will not be able to provide guidance on specific queries. We would love to help, but due to the specific nature of your question we suggest that you consult your financial advisor to give you some options.
Cheers,
Team BankBazaar