How to Invest in Direct Mutual Funds through AMC

How to Invest in Direct Mutual Funds through AMC

Investing in Direct mutual funds save a lot of money over the period of years in contrast to investing in regular mutual funds. Many people tend to buy mutual funds through distributors just because there are many third-party services available in the market attracting potential investors. The misconception is that it is easy to invest in regular mutual funds than to invest in direct funds, in fact it is not that hard. This article will help understand on how to invest in direct mutual funds through AMC websites.

Introduction

Direct mutual funds offer higher returns compared to regular mutual funds. This is because there is no middle man between the investor and the mutual fund house or Asset Management Company. Hence there is no need to pay for distributors and in the long run, the return on investment in direct mutual funds are significantly higher than that of regular mutual funds.

Budding Investors’ Confession

I didn’t paid even a penny to the third-party financial distributor

Many investors claim that they have invested in regular mutual funds via third party financial distributors and they did not even pay a penny.  So you can question that, how will I be paying commission if I bought the mutual funds without any further charges from the third-party service. The fact is, the returns from the mutual fund investments made through such third party distributors already undergo commission charges. The net returns you see are the gains after which the commissions to the distributor are already paid by the AMC.

A mutual fund investment is said to be a regular mutual fund when you invest through third-party services or via financial distributors. There are multiple ways to invest in Direct mutual funds in India. One of the reliable way is to invest directly through the AMC website.

Invest in Direct Mutual Funds through Mutual Fund House

The best and reliable method to invest in to direct mutual funds is to invest directly with the AMC fund website.

How to Identify Mutual Fund House’s Website

There are two ways you can find the mutual fund house’s online investment website. This detailed in the article on How to find Mutual Fund House’s Website. It is always suggested to find the mutual fund online investment website through AMFI. This is mentioned in the approach 2 of the mentioned article. Unless the AMFI website is not working, you can google for the mutual funds website manually. And then you can register and login to proceed with direct mutual fund investments.

New Investors

All you need is to directly register and login to the Mutual Fund website of the fund house. Investors need to provide basic one time registration documents. These include documents like PAN Card, Identity such as VoterID or Aadhar Card, Bank Account Details etc,. KYC needs to be submitted and approved in order to start investing.

Existing Investors

With Login

Existing investors, though not registered with AMC, can directly access their investments from the AMC website. To do so, you need to access the existing investments either via folio id or via PAN card number. Once the AMC identifies the PAN card number, you are required to register and login into the website.

Without Login

Most of the AMCs like Axis, Franklins provide a facility to login via PAN and OTP. In such cases you don’t necessarily need to explicitly register if you have already invested.

Selecting Direct Investment Option

Choose Folio Number

Once you are satisfied with the type of mutual fund scheme you want to invest into. Select the folio number if you are an existing investor. If you are a fresh investor opting to buy fund in that AMC for the first time, a folio number will be automatically generated once you are done with the successful investment.

Selecting the Investment Preference (Direct vs Distributor)

As you know direct investments are intended to gain more returns in the long run. They avoid paying commission to the third party financial distributors. Before you invest, you must select the option of ‘Direct’ investment available. This is the important step in order to invest in direct mutual funds. Do not be encouraged by the distributor if they suggest you to provide their distributor code while investing. This will lead to investments in regular mutual funds. And you may end up having returns that are deducted with commission charges. Once you choose direct mode, you need to select mutual fund scheme that you are interested to invest into.

Choose the Mutual Fund scheme

Double check before investing in Direct Mutual Funds

Almost all the mutual fund schemes are available in two variants, they are Regular and Direct schemes. Lets say you have done research on a particular mutual fund say ‘Franklin India Bluechip Fund – Growth’. You have decided to invest in it as a result of your research. You must cross check before investing that the fund has the word ‘Direct’ included in its name. So the mutual fund in this case will be ‘Franklin India Bluechip Fund – Direct – Growth’. Watch out for the word ‘Direct’ in the fund name before investing.

Make Payment

Provide the amount that you want to invest into the direct mutual fund of your choice. Mutual Funds will have minimum investment amount in order for you to get units allotted. Choose the payment method of your choice and make successful payment.

This is not the only way to invest in direct mutual funds, in fact there are several other ways to do so. 

Do not Worry about maintaining accounts with multiple AMCs

As the days pass on, your investment portfolio may spread across different fund schemes of various AMCs. You will be in a worry that may loose track of few investments in future. But thanks to CAS, a Consolidated Account Statement that frees up your worries. CAS allows you to track all the investments made across the AMCs in a single consolidated statement. You can refer the article which explains how to Track Mutual Fund investments made through different platforms in detail.

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