Invest in Mutual Funds: Documentation and Process

Classroom

oi-Monika Nihalani

By Monika Nihalani

Published: Wednesday, May 25, 2011, 12:27 [IST]

A mutual fund is a portfolio of bonds, shares and other financial securities where one can invest in. You can buy a mutual fund either online or through any financial intermediary. Financial intermediaries can be a bank, brokerage house or third party distributor. There are few steps to follow while investing in mutual funds.

Whether you decide to invest online or offline, you will require the following documents: Photographs, PAN card, Name and Address proof.

As per the new rule of SEBI from January 1, 2011, all those who would want to invest in mutual funds are required to be compliant with know-your-customer (KYC) norms, irrespective of amount they invest in. This means you will not be able to process any fresh MF purchase post January 1, 2011, unless you are MF KYC compliant. This is one new addition to the list of basic documents.

If you want to buy online:

With a single click you can ease your investment and can create your own portfolio. Online mutual fund portals have become popular after entry loads were abolished in August 2009 by SEBI.

Portals such as Fundsindia.com and Fundsupermart.com act as a medium, through which you can invest in multiple mutual fund schemes at the same time. You can construct your own portfolio based on your age and risk-appetite.

Step 1: Visit the website, register and fill up the online form. Provide all necessary information i.e. Name, Address, PAN, bank details, etc.
Step 2: Take a printout of the filled account opening form.
Step 3: Attach copies of relevant documents to the form.
Step 4: Send it to the mailing address of the portal.
Step 5: Once you get the confirmation about account activation on your email, you can start investing.

If you want to buy offline:

You can even buy mutual fund offline through any financial intermediary. You will have to need to remember the following steps while investing in mutual fund offline.

Step 1: You have to contact a distributor or agent of mutual funds.
Step 2: You need to fill an application form provided by them. Provide all necessary information i.e. Name, Address, PAN, etc.
Step 3: Attach copies of relevant documents and submit it along with a cheque or demand draft for the amount of investment.
Step 4: Agent or distributor would submit the application form with the cheque and all relevant documents to the mutual fund company.
Step 5: The mutual fund company would issue you an Account Statement and confirmation about account has been opened within 4 working days from the date of investment.

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