If you are looking for best way to invest in Mutual Funds in India, you have come to the right place. In this post we will talk about different ways you can invest in MF and what you should look for before choosing any of the platform. Before we start, I will explain what is Mutual Funds in couple of lines. Mutual funds can be thought of as a investment vehicle funded by shareholders and managed by professional and experts better known as Fund Manager. The major MF Asset Management company(AMC) in India are
1) ICICI Prudential MF
2) HDFC MF
3) Reliance MF
4) Aditya Birla Sun life MF
5) SBI MF
These AMC are subsidiary of the banks. So if you are buying MF from the banks, you would be buying regular MF instead of direct. Do understand better about Direct vs Regular MF before deciding which is a good fit for you.
In Direct fund, you buy directly through AMC while in regular there is an agent which can either be a bank or MF agent who process your application. Remember that you pay upfront as well as trail commission whenever you purchase regular MF. If you want to reduce commission, you should always try to purchase Direct MF. There would be some charges associated with Direct MF platform but in the long run, direct MF have much better return than regular MF.
Ways to buy regular MF
The major companies which provide online purchase of regular MF are Scripbox, Fundsindia and ZIP by AB money. Apart from this all the banks and stock broker provide you facility to purchase regular Mutual funds. We would be reviewing Scripbox, FundsIndia and ZIPSIP in detail here.
This is easy to use online MF provider which has made it very easy for anyone to purchase MF online. The account opening with them is pretty simple. You just need Address proof, PAN card and Bank details to open account online.
They will check if you PAN card is KYC compliant. If it is already compliant you will just need to upload one more address proof which can be either of these documents show.
Once you input address details, the final step would be to provide your bank details through which the funds transfer will take place.
Once you complete this, you can start investing money with scripbox.
Investing using scripbox is simple and they have chosen couple of funds for various need. So if you are investing for less than a year, they have already selected Reliance Money Manager funds as preferred investment for you. Just choose the amount you want to invest and you are good to go.
In case you want to invest for 1-3 years, they have chosen dynamic debt fund from Birla Sun and AXIS liquid fund. For investment horizon of 3-5+ years, they have a choice of equity funds from ICICI value discovery to L&T India Value funds.
It is very easy to invest online on Scrip box and as they have already chosen funds based on investment horizon, once you open an account, you don’t have to worry about selection of Mutual funds. They do invest in regular funds but if you are someone who don’t want to take a call on which funds to buy and want to invest completely online, they have a good platform and provide good after sales services.
You can start investing with them at www.scripbox.com
Fundsindia are one of the oldest online MF provider in India and they have the most customer trading with them. They have a great online research arm and if you purchase MF through them, you get to read all their research reports for free. They also advise you the best MF after understanding your requirements and investment horizon, so the products in tailor made for your needs.
Online account opening with Fundsindia is very similar to Scipbox and you can open the account online. There MF selection engine is more advanced than Scripbox and based on the answer you provide to the engine, it tells you the best MF you should buy.
They also sell regular MF, so that earn through the trail commission which is part of the AMC fees. You can find our detailed review on Fundindia here.
You can open account and start investing at www.fundsindia.com
ZIPSIP by Aditya Birla Money
This is another regular MF facility provided by AB money. They try to sell themselves as a SIP (Systematic investment plan) provider. But SIP is provided by almost all the other Mutual funds provider also. The account opening can be done online like with fundsindia and Scipbox. They have a cool android app also which helps if you are someone who invest using mobile.
The provide a predefined portfolio based on your age and risk appetite. There is not much change you can do in the portfolio. If you are someone who like to analyses and choose their own MF, Fundsindia would be a good product for you.
So for all the regular MF provider, we have discussed the main three. Remember, that if you don’t mind researching on MF and doing some work on your own, direct Mutual funds would always be a better option. But if you want to make you life simple and don’t mind giving up couple of percentage points as commission, I would recommend you to look at Fundsindia and Scripbox.
Anyone providing regular MF don’t charge anything from the client and get a small percentage from the AMC directly to get the funds.
Direct Mutual funds provider
In 2013, SEBI came up with a concept of Registered investment advisor (IRA) which can be individual or entity which provide investment advice to customer in exchange for a fee. With this regulation, the market was wide open for lots of companies to open online business and start providing advisory services by taking a small monthly fees. The major online operators in this area are Invezta and Oro wealth.
They are the first online Mutual fund RIA which started operating in India and they charge a flat monthly fees based on the portfolio size. So if you are a small investor and your portfolio with them is less than 50,000, then the use of their platform are free. In case it is more than 50K, then there is a monthly charge of Rs 79 per month which includes portfolio reporting, Goal tracking & health check up. In case you want to use all their services, they have a premium package at Rs 109 per month which includes all the above mentioned services along with personalized allocation and exclusive fund selection.
Account opening with them is very easy and you can start by just putting in your basic information like name, address and PAN card details. If you are KYC complaint, you don’t need to do anything more and just have to link your bank account with Invezta account. For that, you just need to upload bank cancelled check which should have your name, bank account number and IFSC code of the bank. once uploaded, you account would be verified and if everything checks out, you should be able to purchase online direct MF using their platform.
There service is easy to use but as there is a monthly charges, in case you have a small folio of 1 lakh, then you will end up paying almost 1% fees per year. But they do provide funds selection and make life easier for the investor. So if you are looking for easy to use platform which provide direct MF investment, look no further and go and open account with them.
You can invest through them by opening account at www.invezta.com
ORO wealth review
They also provide facility to invest in Direct MF online. You can purchase all AMC funds through them and the account opening is very simple if you are KYC compliant. Once you open the account, you have to choose a plan which will best fit your needs.
They have 3 plans catering to different investor. The basic one is free to open but there is a purchase/redemption charge of Rs 50 per transaction if it is less than 50K, for transaction more than 50K, there is a fees of 0.1% of the transaction. There next plan is a charge of Rs 2000 per year and it includes unlimited number of purchase and sale of MF. Apart from that you also get unlimited goal tracking and unlimited checkups.
Finally they have a plan for HNI’s with a charge of Rs 10,000 per year. This have a dedicated relationship manager to work and a quarterly consultation with an expert.
You can have a look at the interface buy opening a free account and if you find it interesting you can move to other plans.
You can invest through them by opening account at www.orowealth.com
Zerodha Coin for Direct MF
Zerodha is a discount broker operating from Bangalore. They have started providing Direct MF on their platforms and user can directly purchase MF through BSE star platform. If you have a MF portfolio of less than 25K, then there is no charge. For any portfolio of more than 25K, there is a charge of Rs 50 per month or Rs 600 per year. You can find detailed Zerodha coin review.
They have one of the lowest charges as far as investing in direct MF is concerned. Zerodha also have a very competitive stock brokerage charges and you can know more about them on Zerodha review.
Mutual Fund Utulity
MFU is an online website managed by funding for all the AMC and provide a platform for investor to buy Direct Mutual fund online. This is a not for profit company and there are no charges to open account with them, nor there is any commission which they receive from AMC.
But account opening with them can be a little difficult. If you have KYC and Aadhar linked to your account, you should be able to open account online and your USER ID would be generated in couple of days once you submit the documents online. Once you receive your USER ID, you have to write email to customer service to send you the password for the account. The whole process is moved online but you feel that the ease of use in not there and it could take you almost a week if you have all the correct documents.
The interface for buying direct MF is also very bare bone. The UI does not give you much confidence but when I tried buying MF for it, most of my transaction went OK without much hitch. So this is find of software which look simple but it does work
There are not many charts and report which are provided on this. You have to manage all on your own if you are looking to run charts on your holding.
You can open the account with MFU at https://www.mfuonline.com/.
The thing with MFU is it was created by SEBI to provide a platform for client to purchase direct MF from one place. All AMC does allow to transact through MFU but most of the AMC have better standalone website to handle their client. So I would suggest that if you want to invest in Direct MF without any charges, look at MF utility or invest directly through AMC website. If you are investing in only couple of Mutual funds, it would be easier to remember passwords but you would not get a consolidated view in one place.
So before deciding look what is more important for you. If you want all your account to be shown in one place with charts and graphs showing returns etc, go with someone like Invezta ot Oro wealth. If you are OK with managing multiple accounts, invest directly through MF Utility or using AMC website could also be a good option.
I hope that I have answered all your question about MF. In case you have any more queries, just feel free to ask about it by writing in the comments below and I will try to answer them.