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4 Different Ways To Invest In Direct Plans of Mutual Funds


With more information at hand for informed individuals, time is now right to work best ways to minimize costs and in return increase your returns on mutual fund schemes by opting for direct plans instead of the regular schemes which though had been suggested by a advisor or consultant. It is indeed the need of the hour provided you have a sound understanding of personal finance and more specifically mutual funds.


4 Different Ways To Invest In Direct Plans of Mutual Funds

Why direct plans of mutual funds?

Herein its working provides better returns or yield to investors and hence it should be the choice. And how it does so, we give an explainer on the same here. Direct plan of a mutual fund scheme includes the same set of securities in the same proportion as a regular scheme but with low fund management cost have lower NAVs. This cost benefit though seems negligible results in better returns for the investors as fund administration and operating charges are recurring in nature.

Switching from regular plan to a direct plan in a mutual fund scheme

As a substantial amount is paid towards expense ratio in case of regular schemes, it will make sense to switch to a direct plan for cost savings nonetheless here you will have to forego the experience of an advisor. For switching the scheme, AMCs or fund houses provide an option and here in both the fund and scheme name needs to be specified and a instruction has to be placed for effecting the switch to a direct plan by submitting a tear-away slip to the AMC.

Different ways to invest in Direct plans of mutual fund schemes

Further in a case when you wish to start with mutual fund investment through direct plans, there are provided 4 ways by which you can get your mutual fund investment journey started:

1. Through AMCs: When subscribing to a mutual fund scheme you need to do it by filling an application form and while making an application, you need to check in the box for choosing direct plan.


2. Through Mutual fund registrars: CAMS and Karvy are the 2 principal registrars which manage all of the leading funds barring Sundaram BNP and Templeton. And if you are someone seeking direct plans in mutual funds, you can always visit the website of these registrars with a limitation that they provide direct plans only for AMCs whey they happen to be the registrar.

3. Mutual fund aggregators: These aggregators provide an online platform to make investment in mutual funds and herein also you need to check direct plans and after you apply for the scheme you are assigned a unique Common Account Number or CAN. But before the allotment, like with other financial matters, you will have to go through the KYC process.

4. Registered advisors: You can also go for direct plans offered by these registered financial advisors who also provide an array of advisory related services for a costs.

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