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How to invest in direct mutual funds — online and offline

businessmayor
personal financeMay 8, 2024
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What are direct mutual fund plans?

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What are direct mutual fund plans?

Mutual fund direct plans are for investors who want to invest on their own and not through a distributor. They get the benefit of a lower expense ratio as compared to a regular plan. This lower expense ratio results in comparatively higher returns over a period of time.

Text: Centre for Investment Education and Learning (CIEL)

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Can you buy direct mutual funds online?

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Can you buy direct mutual funds online?

Investments can be made on the online platform of the fund house or the Registrar and Transfer Agent (RTA). One can use generic platforms such as Mutual Fund Utilities (MFU) stock exchange platforms or other mutual fund platforms and portals. If the investment is being made from a distributor platform, one cannot choose direct plans. While filling up the online form, the investor must choose/ actively select the “Direct” plan option.

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How to invest in direct mutual funds offline

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How to invest in direct mutual funds offline

One can invest by filling up a mutual fund application form physically and writing “DIRECT” in the blank space provided to fill up the ARN of the distributor in the application form. If the ARN is prefilled in the form, an investor can strike off the ARN and write “DIRECT” in bold on top of the form. The application form along with the investment instrument can be submitted to the nearest mutual fund branch or RTA office for onward processing.

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Do you want to switch to direct mutual funds?

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Do you want to switch to direct mutual funds?

Investors also have the option to switch their current investments from a regular plan to a direct plan by filling up a switch request. This can be done online and offline. Switching of units essentially entails redemption from the existing investment and purchase into the new investment and is thus taxed accordingly concerning capital gains tax and exit loads on the same.
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Keep this thing in mind

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Keep this thing in mind

If an investor is not well conversant with mutual funds and needs help to choose the right investment, it is advisable to invest through the regular plan and a distributor who is trained to guide the investor.

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