Just as there are many mutual fund schemes to choose from, you can resort to several ways of investing in them. There are options for both online and offline investment, or direct as well as regular plans, if you are wondering how to buy mutual funds. Needless to say, every option comes with its own benefits and limitations and these vary from one investor to another.
Direct Plan: from 1st January 2013, all the major mutual fund firms/houses have already launched a new plan called the Direct Plan under the purview of their existing schemes. Investors who do not use distributors to deploy mutual fund investments will find this as a perfect option which promises a lower expense ratio compared to existing fund schemes of the AMC.
Through intermediaries: A wide variety of intermediaries include most banks, stock brokers and regional/national distribution companies along with a large number of individuals and small financial advisory companies.
Through IFAs: IFAs are Independent Financial Advisors, who are individuals acting as agents to facilitate a mutual fund investment. They assist you with regards to filling in the application form and also submitting this form to your AMC.
Directly with the AMC: If you are a first-timer, you may have to go to the AMC’s office to make your investment. Subsequently, all investments that you make in future across various fund schemes offered by a single AMC can be deployed through either offline/online channels. You have to make use of the folio number that is available under your name.
Through online portals: there are several third party online portals, from where one can invest in various mutual fund schemes across AMCs. You can enjoy the facility of easy fund transfer as most of the portals have tie-ups with banks.
Through your bank: Banks also play a vital role as intermediaries are distributing fund schemes offered by several AMCs.
Through Demat and online trading account: you can buy and sell mutual fund schemes through your Demat account.
Besides, there are other ways such as electronic money transfer, Electronic Clearing Service (ECS), National Electronic Fund Transfer (NEFT) and so on.
