7 Easy & Different Ways To Invest In Mutual Funds

Mutual funds are an investment platform that takes money from small investors and invests this money in financial securities like shares, bonds, short-term debts, gold, etc. Investors invest in mutual funds by buying their shares. This way, the investor gets part ownership in the fund.Nowadays, many people want to invest in mutual funds. They are affordable, can easily be redeemed, are managed by professionals and help diversify investments.

For investing in mutual funds , an investor can have a few funds. A small amount can also be invested in mutual funds. The investment can either be a lump sum, or the investor can opt for SIP(Systematic Investment Plan) . A small amount of Rs 500 is required to invest in SIP. The payment schedule can be monthly, quarterly, half-yearly or annually. The investor can invest in both the Direct mutual fund plan and the Regular mutual fund plan.Nowadays, fund managers are appointed by mutual fund companies to manage the funds of investors who want to invest in different mutual fund schemes. These investments include equities, gold, debt and other securities. The fund manager gathers the money from different investors and puts this amount across various asset classes. All the investors then share the profits depending upon their allotted invested units.

1) Investing in a Mutual Fund From Direct Plan(AMC)

Both online and offline mutual fund investments can be made by visiting the AMC website.These online mutual fund investments can be made by:

1. Opening aMutual Fund account.
2. Provide personal details which are used for investments.
3. Fill FATCA Form.
4. Submit bank details.
5. Upload a cancelled cheque image.
6. Provide KYC documents for verification. These can be an Aadhaar card, PAN card, Driving License, Voter ID, or Passport.
7. Once verified, transfer funds.

Offline mutual fund investments can be made by visiting the AMC (Asset Management Company) office. The duly filled application form and the KYC documents should be submitted physically. Payment can be made after the verification process is completed.

2) Investing in a Mutual Fund From Regular Plans (Investment Platform)

This single account access platform manages all mutual fund investments, like investing and tracking etc., with different AMCs. For investing online, follow these steps:

1. Open an account with an investment platform.
2. Pick up a plan or an investment scheme.
3. Choose the payment option (lumpsum or SIP) and the amount to be invested.
4. Personal details like PAN and bank details are supposed to be filled in and submitted.
5. To complete the investment process, transfer money online.

3) Investing in a Mutual Fund Using a Demat Account

Investing and transactions in a mutual fund can be done using a demat account. The investor should log in to the demat account. After this, investors can choose the fund they want to invest in. The investment is completed by transferring the funds online.

4) Investing in a mutual fund with the help of a mutual fund distributor

Mutual fund distributors are intermediaries for promoting and selling mutual funds. They must register with AMFI (Association of Mutual Funds in India). They must provide financial advice to clients and help them in transactions related to mutual funds. The fund house gives these distributors a commission. The investment cost of mutual fund units (regular plan) purchased from them is higher than those purchased directly from the AMCs. Investing in mutual funds through a distributor is always advisable for new investors. They can advise the right product to a new investor. The advice is done considering the investor's risk appetite and investment needs. Also Read : How Do Mutual Funds Work?

5) Investing in Mutual Funds Directly With the Asset Management Company (AMC)

A person can invest in mutual funds directly by contacting any AMC (Asset Management Company). They can be approached online or directly in their office. New investors are supposed to submit their KYC (Know Your Customer) documents to the AMC. The KYC, too, can be done online or by visiting them in their office. Direct plans can be bought from these Asset Management Companies.The expense ratio of these direct plans is less than the regular plans. Direct plans give higher returns than Regular plans. A person who understands the risk appetite and has already invested in mutual funds can invest in direct plans. Individuals with knowledge about the financial markets can also invest in direct plans independently. The mutual fund units bought directly from an Asset Management Company have to manage bought and managed by an investor. A fund manager is appointed elsewhere to guide the investor.

6) Investing in Mutual Funds Through an Investment Registered Advisor

IRA (Investment Registered Advisors) are registered through SEBI (Securities and Exchange Board of India) and do not get commissions from AMCs. Link Direct plan mutual fund investment can be made through any Investment Registered Advisor. They charge a fee for the services rendered. Since these people (IRA) do not get any commission from AMCs, there is no conflict of interest.All mutual fund distributors should prioritize their client's (investor's) interests and give unbiased advice. They are supposed to provide correct information to their clients. The IRA can suggest suitable mutual fund investments based on the investor's risk appetite.AMFIs (Association of Mutual Funds in India) Code of Conduct issues guidelines for mutual fund distributors. This body specifies that mutual fund distributors should always prioritise the interests of their clients over their interests. An investor can invest through an Investment Registered Advisor or a Mutual Fund Distributor.

7) Investing in Mutual Funds Through Registrars and Transfer Agents

RTA (Registrar and Transfer Agents) are firms registered with SEBI (Securities and Exchange Board of India) for promoting mutual fund investments. They act as a mediator between the mutual fund houses and the investors. The investor's data, such as transactions and balance in the account, is maintained and managed by the Registrar and Transfer Agents. The mutual fund houses for this work hire them. The investor can invest in regular and direct plans through a Registrar and Transfer Agent.The services provided by Registrar and Transfer Agents to their investors are as follows:

1. Investing service.
2. Value-added services
3. KYC
4. Fund accounting
5. Pre-launch support
6. Knowledge and technology partner
7. Documents management services

Also Read : What is Income Tax in India?

A person should consider the income, expenses, tax obligations, long and short-term goals etc. and then invest in mutual funds. If the person wants a piece of expert advice, then a Mutual Fund Distributor, Investment Registered Advisors or Registrar and Transfer Agents can be approached. They will help tailor the investing plan according to the requirement of an individual. Ideally, an investment advisor should be consulted first, and then an investor could approach a distributor for a mutual fund product. Also Read What are Mutual Funds? How it Works, Meaning, Benefits & Types {356335A5-C585-4A58-8353-CDC03022BD8C}