How many millionaires do you know who have become wealthy by investing in savings accounts?
A savings account is a reliable place to build your emergency fund. Beyond that, if you are looking , you have to do what the world does – invest in mutual funds. With mutual funds your money has the potential to generate more wealth over the years.
If you think investing is gambling, you might have to rethink. The work involved requires determination and patience. And if you can do that, you will see the benefits.
As India transitions towards the digital economy, investing in Direct Mutual funds has become easier and popular.
Learn how to invest in direct mutual funds online in India with this step-by-step guide—KYC, best platforms, SIP tips, and monitoring advice
1. Understand Direct Mutual Funds
Direct mutual funds are those funds that are bought directly from the fund house (AMC- Asset Management Company). There is no middle man like agents or brokers involved in these purchases. So you save the commission. Over time, the money you save on commissions and reinvest will generate a solid return.
2. Complete Your KYC
Before investing, you must complete the Know Your Customer (KYC) process
You can do it by visiting a KYC registration agency website such as CAMS or KFintech, or you can complete e-KYC on mutual fund apps.
Next, you will have to provide your details like PAN card, Aadhaar card, photograph, and bank details.
At the end you have to complete in-person verification or use Aadhaar-based OTP for instant e-KYC approval.
3. Choose an Online Platform
You can invest in direct plans through:
- AMC Websites: Every mutual fund company, like HDFC AMC or SBI Mutual Fund, lets you invest directly on their site.
- Aggregator Platforms: Apps like Groww, Coin by Zerodha, Paytm Money, Kuvera, and ET Money allow you to buy direct mutual funds from multiple fund houses in one place.
4. Select the Right Mutual Fund
Direct Mutual Funds carry market risk but are monitored by SEBI.
Invest in Equity: If you are someone who could afford to take high risks in expectation of high returns.
Moderate risk: There is an option of mixing your investments in hybrid funds. These funds mix your money in equity which is high risk but high return and debt which is low risk but moderate return.
Low risk: There are some mutual funds that carry low risk and give a modest return.
So, the investor must first assess their risk taking abilities and then take a call.
5. Start Your Investment
After choosing your funds, login to the mutual fund platform or the AMC site. Ensure to select “direct plan’ for your scheme, enter the amount you want to invest and make the payment.
You’ll receive a confirmation email and account statement shortly after.
6. Which is better—SIP or lumpsum?
For steady income earners, SIP offers disciplined, long-term growth.
7. What is the minimum SIP amount?
You can start most SIPs with ₹500–₹1,000 per month.
After you decide on the fund, visit the mutual fund app or fund house’s website, fill your details, link your bank account and begin to invest.
8. Monitor and Review
It is recommended to track your mutual fund’s progress once a year. If your goals have changed within this time, you can easily adjust your funds to suit your current needs.
External links – SEBI Circular on Direct Plan https://www.sebi.gov.in/legal/circulars/apr-2023/direct-plan-for-schemes-of-alternative-investment-funds-aifs-and-trail-model-for-distribution-commission-in-aifs_69996.html
Read more: Top Business Magazine
