There are two ways of investing in a mutual fund plan- Direct Plan and Regular Plan. The direct plans are the ones in which the fund houses or Asset Management Companies do not charge any fee which might be the distributor expenses or transaction fee. The same fund manager handles both the options.
When you go for investing through the aid of a broker or agent or distributor, that is a Regular Plan. When no such aid is involved and you yourself ‘Directly’ invest in a scheme that is called a Direct Plan. One of the most important reasons to invest in the direct plan is, it saves you a lot of money you pay as commission to the agent or broker in the regular plan. In fact, you can add that commission amount in your investments and reduce the expense ratio of the scheme by approximately 1-2%. This additional investment which may seem minimal while investing will reap bigger benefits in the long-term.
HOW TO INVEST IN DIRECT MUTUAL FUND PLAN?
There are two ways in which you can invest in a direct mutual fund plan- ONLINE or OFFLINE
INVESTING IN MUTUAL FUNDS ONLINE
1. YOU CAN VISIT THE WEBSITE OF THE COMPANY YOU WISH TO INVEST IN
If you are a KYC complaint investor, you can simply visit the website or online portal of the company of AMC you wish to invest in. follow these steps to make an investment;
Step 1: Make an account and register yourself with the mutual fund company
Step 2: Select the scheme you desire
Step 3: Choose the investment detail and plan type- Direct or Regular
Step 4: Enter the RIA code if availing the services of one
Step 5: Select your mode of payment and fill in the bank details
Step 6: Verify the information and complete transaction
2. YOU CAN INVEST THROUGH PIGGY AT WWW.PIGGY.CO.IN (AN RIA- REGISTERED INVESTMENT ADVISER)
While you go for investing, there are multiple facets which need to be considered in order to make an informed decision. These may be:
1. Adopting the best investment strategy
2. Setting up SMART goals
3. Considering the risk profile
4. Picking up the right one
5. Tax deductions and implications
Taking care of all of these and some more hidden aspects can get a bit tedious at times. Adopting a method which offers charged services on investment advisory and financial planning can prove to be a blessing. RIAs like PIGGY are online platforms which offer advisory services to investors based on complex algorithms and market research.
With the user-friendly interface and simplified investment platform, you can avail from a wide range of services which are unbiased and logic-based.
Follow these simple steps to invest through a single click;
Step 1: Get yourself registered at www.piggy.co.in
Step 2: complete your KYC
Step 3: get your risk profile assessed (Additional benefit)
Step 4: get presented with the best-suited portfolio based on your inputs
Step 5: click and invest.
3. YOU CAN USE CAMS/KARVY
CAMS or Karvy fall under the Registrar and Transfer Agent category which facilitate investing in MF online. But the biggest limitation to them is, they offer services against funds which are registered with them making the choice limited. You can visit the website of CAMS or Karvy to get the list of funds registered with them.
INVESTING IN MUTUAL FUNDS OFFLINE
1. YOU CAN VISIT YOUR NEAREST AMC BRANCH OR FUND HOUSE
In this case, you can simply go to the AMC office and fill in the details in a Common Application Form/ SIP form once you have already decided which funds to invest in. You can choose to invest through SIP which would require your National Automated Clearing House (NACH) mandate form containing all necessary and required details regarding SIP. Every time you wish to make changes regarding funds or personal details etc., you will have to visit the office and fill in a form.
2. YOU CAN USE MUTUAL FUND UTILITIES
A Mutual Fund Utilities is a platform shared by multiple fund houses for financial (investment) transaction. It would require you to create an account first which stands common for all fund houses. Investing through MFU mandatorily requires you to submit a PayEezz form which is a facility offered by the MFU enabling an investor to register once and give standing instructions to the bank/banker authorizing Mutual Fund Utility to make transactions through his/her account which may be SIP or Lump Sum.
The following are the documents whose self-attested copies are required to invest in the direct plan. Also, you need to be KYC complaint;
1. POI (Proof of Identity)
2. PAN card
3. POA (Proof of Address)
If you are a KYC compliant investor, all you need is a PAN card or PAN number to start investing. Every time you make a new investment, your KYC compliance is checked through PAN card linked to Aadhar card.
If you are investing for the first time and your KYC is not complete, you would be asked to do the same before making any investments. KYC can be completed both online as well as offline by visiting the fund house or AMC. This is a one-time process for all your future investments.
SWITCHING FROM REGULAR TO DIRECT PLAN- IS THERE A WAY?
Yes, you can switch your plan from regular to direct plan. Two important factors which should be considered before switching plans are Exit Load and Taxation. The switch can be made in one click if you are investing through Piggy. Simply select the fund you wish to switch plan off and click on ‘Smart Switch’ which will enable you to do the conversion within seconds from Regular to Direct plan.
This can also be done on the AMC’s online portal as well.
Read here to know about key differences between Regular and Direct plan https://www.piggy.co.in/blog/regular-vs-direct-mutual-fund-schemes/
Start Investing, stay Invested!