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Invest in Mutual Funds Online

In India, you can invest in mutual funds online itself, which is a huge benefit. Thus, once you have identified the best mutual funds to invest in India, all you need to do is to get a Demat account and an investment account with a registered broker for online trading in mutual fund SIP.

Mutual funds investment in India

Mutual funds investment in India has gained in popularity as an investment asset class, especially in the past two decades. Investors are constantly on the lookout for the mutual fund investment plans in India. Mutual funds investments are actively managed by a professional fund manager. Thus, experienced fund managers help investors diversify their portfolio and spread their risks effectively across stocks and sectors. In fact, if you are a first-time investor or someone who is not familiar with the way stock markets operate, then mutual funds are an ideal way for you to enter the market.

How to invest in mutual funds?

The answer to the prominent question – ‘how to invest in mutual funds?’ is a one simple term – Systematic Investment Plan (SIP). One of the easiest and effective ways of investing in mutual funds is through the SIP route. Investing through the SIP route allows you as an investor to invest fixed amounts of money at regular intervals, monthly or quarterly, for a continuous period, in a mutual fund scheme. Mutual funds investment plans in India through the SIP route with a long-term horizon will help you is achieving your short-term goals such as a foreign vacation and long-term goals such as retirement and own home. SIPs help create investment discipline in you, which is very crucial for achieving your financial objectives in the long run while fighting inflation.

Benefits of investing in mutual fund SIPs in India

Following are some of the major benefits of mutual funds investment plans in India through the SIP route:

  • Regular monthly or period investment into your identified mutual fund investment plans.
  • Helps in maintaining the all-important discipline with regards to your asset allocation.
  • Provides you with the Rupee cost averaging benefit.
  • You gain through the power of compounding over a long-term horizon, which is crucial for fighting inflation to achieve financial goals.
  • You can invest in mutual fund SIP schemes in small amounts, which is a big benefit.
  • Best mutual funds to invest in India.

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Mutual Funds FAQs

What is a Mutual fund?

Mutual fund is a mechanism for pooling money by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is diversified because all stocks may not move in the same direction in the same proportion at the same time. Mutual funds issue units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

The profits or losses are shared by investors in proportion to their investments. Mutual funds normally come out with a number of schemes which are launched from time to time with different investment objectives. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) before it can collect funds from the public.

How do I see my holdings?

If you have a Demat account with ACMIIL, monthly demat statements will be sent to your correspondence address registered with us.

Why should I invest in Mutual Fund?

Different investment avenues are available to investors. Mutual funds also offer good investment opportunities to the investors. Like all investments, they also carry certain risks.

The investors should compare the risks and expected returns after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts while making investment decisions.

With an objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answer format which may help the investors in taking investment decisions.

Mutual funds are a vital tool to ensure your financial well-being. They help you to get better returns even from relatively smaller investment amounts, and are quite flexible in nature. Whether you want to invest a small amount at regular intervals or a big lumpsum amount at once, you will find a mutual fund product suitable for your needs. With options like SIP (Systematic Investment Plan) and SWP (Systematic Withdrawal Plan), mutual funds can help you plan for short-term as well as long-term goals and financial liabilities.

How can apply for mutual funds online through ACMIIL?

Any category / type of investor can apply for mutual funds online, so long as the basic eligibility requirements like possessing the appropriate documents, account details and completing the KYC process are taken care of.

Who can invest in Mutual Fund?

  • Resident Indians
  • Non-resident Indians (NRI)
  • Persons of Indian Origin (POI)
  • Indian Public Sector Undertakings
  • Indian Private Sector Undertakings
  • Parents/Guardians on behalf of minors
  • Wakf Boards
  • Hindu Undivided Family
  • Sole Proprietorship Firms
  • Partnership Firms
  • Cooperative Societies
  • Charitable or Religious Trusts
  • Trustee, AMC or Sponsor of their associates
  • Endowment or Registered Societies
  • Army/Air Force/Navy/Para-Military funds and other eligible institutions
  • Scientific and/or industrial research organizations
  • And other associations, institutions, bodies, etc., authorized to invest in mutual funds

What are the documents required to invest in  Mutual fund?

Individual – Resident Indian citizens need to submit only their KYC documents along with the application forms to invest in Mutual Funds.

NRI – Non-resident Indians need to submit the following supporting documents in addition to PAN as proof of identity and address:

If any of the KYC documents are in a foreign language, they have to be translated into English before submission. Certified true copy of their passport Certified true copies of proofs of overseas address and permanent address

Corporates – 

Balance sheets of the last 2 financial years (to be submitted every year)

Latest share holding pattern, including list of all those holding control either directly or indirectly in the company, in terms of SEBI

Takeover regulations, duly certified by the company secretary/whole-time director/MD (to be submitted every year)

Photograph, POI, POA, PAN and DIN numbers of full-time directors, or two directors in charge of day-to-day operations

Photograph, POI, POA, and PAN of individual promoters who hold control, either directly or indirectly

Copies of the memorandum, articles of association, and certificate of incorporation

Copy of the board resolution for investment in securities market

List of authorized signatories with specimen signatures

Partnership firms:

Balance sheets of the last 2 financial years (to be submitted every year)

Certificate of registration (for registered partnership firms only)

Copy of partnership deed

List of authorized signatories with specimen signatures

Photograph, POI, POA, and PAN of the partners

Hindu Undivided Families:

PAN of the HUF

Deed of declaration of HUF/List of coparceners

Bank passbook/statement in the name of the HUF

Photograph, POI, POA, and PAN of the Karta

Trusts:

Balance sheets of the last 2 financial years (to be submitted every year)

Certificate of registration (for registered trusts only)

Copy of trust deed

List of trustees managed by managing trustees/CA

Photograph, POI, POA, and PAN of the trustees

Unincorporated associations:

Proof of existence or constitution document

Resolution of the managing body and Power of Attorney granted to transact business on its behalf

List of authorized signatories with specimen signatures

Banks/Institutional investors:

Copy of the constitution/registration or annual report/balance sheet for the previous 2 financial years

List of authorized signatories with specimen signatures

Foreign Institutional Investors (FIIs):

Copy of SEBI registration certificate

List of authorized signatories with specimen signatures

Armed forces and government bodies:

Self-certification on letterhead

List of authorized signatories with specimen signatures

Registered societies:

Copy of registration certificate under the Societies Registration Act

List of members of the managing committee

Committee resolution for persons authorized to act as authorized signatories, with their specimen signatures

True copy of society rules and by-laws, certified by the chairman or secretary

What are the different types of Mutual Fund schemes?

There are three ways in which you can classify mutual funds, according to their according to their structure, their objective and the sectors they invest in. Here’s a quick round-up of mutual fund categories for all three classifications.

Structure-based

Open Ended Schemes: Schemes without a fixed maturity period, that let you subscribe for or redeem units any time. They offer the benefit of liquidity.

Close Ended Schemes: Schemes with a fixed maturity period, which are open for subscription for a specified duration during the launch, and allow you to invest in them from 3-10 years. After the launch, interested investors can buy or sell units of the scheme on stock exchanges where they are listed. As an exit route, closed mutual funds necessarily have to offer either a repurchase at market value, for a specific time frame or allow trading of units on stock exchanges.

Interval Schemes: A combination of open ended and close ended schemes, interval schemes are open for sale and repurchase only during a specific duration.

Objective-based

Growth Schemes: Schemes that invest in equities and are designed to offer maximum growth over medium and long term, ideal for investors who are in their prime earning years. These schemes are comparatively high risk, and offer investors options like capital appreciation and dividend option.

Income Schemes: These schemes invest in fixed income securities, are less risky, and a good option for investors who want to generate steady income streams.

Balanced Schemes: Investments are done in equity and debt securities to generate regular income and moderate growth. They invest 40% and 60% in equity and debt respectively, and their NAVs are likely to be less volatile than those of pure equity schemes.

Liquid Schemes: Safe, short term instrument investments to generate quick returns while still offering liquidity. Returns on these schemes fluctuate much less as compared to other funds and they are a good option for individual investors who want to park their surplus funds.

Gilt Funds: For investors who are looking for extremely safe investments, these schemes invest only in government bonds and securities. While these schemes have no default risk, their NAVs still fluctuate as a result of change in interest rates and other economic factors.

Tax Saving Schemes: Investments in funds that offer tax deduction or whose returns in the form of dividends are not taxed. These tax rebates are offered by the government to incentivize investments. The funds are mainly invested in equities and growth and opportunities associated with tax saving schemes are similar to those of equity schemes.

Index Funds: These funds invest exactly according to the portfolio and weightage of a specific stock exchange index. Their NAVs rise and fall according to the changes in the index, with a slight difference in percentage. These could also be Exchange traded Funds (ETFs), which get traded on stock exchanges.

Special Schemes

Sector Specific Funds: Invest in funds of companies based on certain sectors that are booming or are expected to do well in light of the prevalent market situations. The returns of these funds depend on how the sector performs, and it is important to track sectors carefully, or seek help from an expert while investing in these funds. Though high on returns, these funds tend to be more risky as compared to diversified funds.

Can NRI’s invest in Mutual funds in India?

Yes NRI’s can invest in Mutual fund in India.  All details about the regulations and procedures for NRI investments in a particular scheme are available in the offer document of that mutual fund scheme.

How to fill up the application form of a mutual fund scheme?

An investor must mention clearly his name, address, number of units applied or such other information as required in the application form. He must give his bank account number so as to avoid any fraudulent encashment, cheque,draft issued by mutual fund at-later date for purpose dividend or repurchase any changes in the address bank account number etc at-later date should be informed to mutual fund immediately.

When will I get certificate or statement of account after investing in a mutual fund?

You will receive it within a week time AMC sent account statement on the address available in CKYC database.

How long will it take for transfer of units after purchase from stock markets in case of close-ended schemes?

According to SEBI regulations, transfer of units needs to get done within thirty days from the date of lodgement of certificates with the mutual fund.

How will I come to know about the changes, if any, which may occur in the mutual fund?

  • Advertisements in leading newspapers
  • Websites of mutual fund companies
  • Agents and distributors of mutual funds
  • Banks and post offices that function as distributors of mutual funds

Remember that banks and post offices are not responsible for the performance of the funds they distribute and it is always advisable to track performance of funds before investing rather than relying on agents and distributors who give you gifts or incentives to invest in a particular fund.

How to know the performance of a mutual fund scheme?

The performance of your mutual fund is reflected in its Net Asset Value (NAV), which is declared at the end of every business day. These are accessible on the website of the Association of Mutual Funds in India (AMFI), where it is mandatory by law, as well as on the fund’s own website. The mutual fund company also has a legal obligation to publish an annual report as well as a half-yearly report on the performance of their mutual funds. Some mutual fund companies may send this out to investors too. Apart from NAV, a ratio of the mutual fund’s returns / yields tracked across time periods ranging from the last 6 months, I year, 3 years, 5 years and since inception is used as a performance measure. Apart from these, various studies are published by financial newspapers and research agencies which provide insights on the performance of funds as well as their ranking in terms of performance. These could be looked at to track performance and you could even compare fund performance with that of other funds in the same category to judge how well it is doing.

What is New Fund offer?

An NFO or New Fund offer is a new opportunity for investor to invest. An NFO could be the offer for a new mutual fund scheme that is being launched by the company, and alternately, the NFO could also be the launch of additional units of existing close-ended funds, that are available for investing.

Can an investor appoint a nominee for his investment in units of a mutual fund?

Yes, . A nominee can be appointed by individuals who hold mutual fund units jointly or singly. However non-individuals including society, trust, body corporate, partnership firm, Kata of Hindu undivided family , holder of Power of Attorney cannot appoint a nominee.

If mutual fund scheme winds up, what happens to the money invested? How can investors redress their complaints?

In case a scheme winds up, the mutual fund will pay out a sum based on prevailing NAV, after adjusting for the expenses. You will also receive a report on the winding up, which will include all the necessary details.

Where can I contact for any other query?

You can contact our Customer Service Desk at 022-28584545.

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