Mutual funds are great investment vehicles that pool funds from multiple investors and invest them in a basket of different stocks or securities. Due to the inherent diversification that they provide, they are a great way to invest in the financial markets. If you’re someone who might be interested in investing in such an option, then here’s everything that you need to know about the process that you would have to follow.
Fortunately, there are multiple ways to invest in a mutual fund. This includes both online and offline methods. Let’s take a quick look at each of them.
An AMC, also known as an Asset Management Company, is the term used to refer to a mutual fund house. One of the best ways to invest in mutual funds is by approaching the AMCs that issue the funds.
All Asset Management Companies have their dedicated website through which you can invest in a mutual fund. All that you would need to do is register on their platform, fill up the online mutual fund application form, submit all the necessary documents, and complete the KYC (Know Your Customer) norms. That’s it. The mutual fund units will be directly credited to your demat account.
Nowadays, AMCs have also come up with smartphone applications. You can invest in a mutual fund of your choice by downloading the respective AMC mobile app on your smartphone and completing the application process.
Alternatively, if you prefer to apply offline, simply head on over to the nearest branch of the AMC whose mutual fund you wish to invest in. Fill up the manual mutual fund application form, attach all the documents, and submit the same to the relationship manager. Once your application is processed, you should receive mutual funds on the Demat account specified by you.
This is by far the most popular way of investing in mutual funds. If you have a trading account with a stockbroker, you can quickly invest in the fund of your choice. Simply log into your trading account and navigate to the mutual fund's section.
Here, search for the mutual fund that you’re interested in and proceed to complete the application form. The funds for the investment will be debited from your trading account or the bank account linked to your trading account.
Many banking institutions also act as stockbrokers. In this case, you can simply head on over to the nearest branch of your bank and request a mutual fund application. Fill out the application and attach all the necessary documents to it and submit the same to the bank’s representative. Upon verifying your application, the applied number of units will be credited to the demat account specified by you.
Alternatively, you can also do this online. Log into the internet banking portal of your bank. Then, navigate to the mutual fund's section. Here, you can choose the fund that you wish to invest in and complete the online application. The funds will be debited from your bank account and the respective units credited to you after successful verification and processing.
Now, you know how to invest in mutual funds! However, also keep in mind that investing in mutual funds is not the one and only way to invest in the stock market. With a demat account, you can also invest in assets other than mutual funds such as upcoming IPOs of companies and debt instruments. So, what’re you waiting for? Make your way over to the website of Motilal Oswal today and open a demat account for free.