Introduction

• If you plan to invest in mutual funds, then please keep reading this guide for a better understanding of mutual funds for beginners.
• With the emergence of technology, investing in mutual funds has become even more convenient.
• Various popular online apps allow investors to invest in mutual funds seamlessly and without hassle.
• However, investors often think twice before trusting this process. The reason is their concern about the fees incurred by these portals.
• In this blog, we will walk you through the commission charged on mutual fund investments.

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Amount Charged by Investment Platforms on Mutual Fund Investments?

• Investment platforms charge a commission on mutual fund investments made through their portal.
• The commission varies as per the mutual fund scheme that’s being invested in.
• The commission charged by investment platforms is often referred to as the 'expense ratio'.
• The expense ratio is the total cost of handling a mutual fund and is indicated as a percentage of the fund’s assets.
• The expense ratio includes all costs related to managing the mutual fund, including administrative fees, management fees, and other charges.

What is the Exact Value of the Expense Ratio?

• Some mutual fund platforms charge an expense ratio that varies between 0.05% and 1.0% for mutual fund investments carried out through their platform.
• For instance, if person X is investing in a mutual fund scheme with an expense ratio of 1%, then the investment app may charge an extra expense ratio of 0.05% to 0.10%.
• Please note that the expense ratio charged is within industry standards, which makes these platforms the best online mutual fund apps for beginners as well.

What are the Benefits of Choosing Online Mutual Fund Investment Platforms?

• The difference lies in the commission charged. Some platforms charge relatively lower commissions than other online investment platforms. For example, some platforms charge an expense ratio of at most 2% for mutual fund investments made through them.
• Please note that the commission charged by an investment platform is just one aspect to consider when choosing a mutual fund platform to invest in.
• There are several other factors to take into account, such as the range of mutual fund schemes available, the quality of client support, and the ease of using the platform.

What are the Other Fees Charged by Mutual Fund Apps?

• Mutual fund apps don’t charge any additional fees for investing in mutual funds other than the expense ratio. Yet, one should keep in mind that mutual fund schemes may have other fees or third-party commissions associated with them, such as entry and exit loads.
• Investors should read the Scheme Information Document (SID) carefully before investing in a mutual fund scheme to be aware of any additional charges or fees related to it. The apps offer easy access to the SID for mutual fund schemes in their portals.

How Do I Purchase Mutual Funds?

Follow the below steps to buy mutual funds:

• Download the app through the app stores or simply search for it on the internet.
• Enter your email ID and set a unique password that should be difficult to decode.
• Verify the OTP using your registered mobile number.
• Verify your PAN card details.
• Fill in your details, like name, gender, etc.
• Enter KYC-related details.
• Choose your mutual fund nominee. Please note that this is optional.
• Upload a clear picture of your address proof, PAN card, and passport-size photo.
• Upload your digital signature.

Conclusion

• To sum up, several of the best platforms for online investment don’t make it complicated to invest in mutual funds.
• It's simple to use them and they don’t charge any extra fees other than the expense ratio.
• The newcomers will find these platforms extremely helpful in starting their mutual fund journey.
• What are you waiting for? Start your investment journey now!