An Easy Step-by-step Guide to Invest In Mutual Funds

Mutual funds can be a convenient way to grow your wealth, especially when you don’t have much experience in the stock market. While this exposes you to risk, you can invest in mutual funds as per your risk appetite to satisfy your short-term and long-term financial goals. Yet, the first step should be learning how to invest in mutual funds.

Why Mutual Funds?

Mutual funds offer various benefits that make them a standout choice for investment. Here are some of them. 

• Diversification: Since you can choose multiple schemes across debt, equity and a combination of these, you can easily balance your risk and reward with mutual funds. You can also adjust your portfolio with age and time. 
• Flexibility: There is so much variety in schemes that you can choose one or more based on your risk appetite and financial objectives. What’s more, you can also withdraw when needed based on the type of scheme you have chosen. 
• Professional Guidance: Fund managers manage your investment and make the right calls based on market dynamics, so you don’t have to. Their experience guides them to facilitate growth for you along with the other investors. 
• Liquidity: You can invest in open-ended funds, which allows you to liquidate your units as per your choice. This gives you ready access to funds when you need them. 
• Access and Affordability: While other investment options require a lump sum investment, MFs are not limited as you can also make regular investments through SIPs (Systematic Investment Plans). 
• Tax Benefits: You will also get tax benefits if you invest in certain funds, such as ELSS (Equity Linked Savings Schemes).
• Regulatory Body: In India, SEBI ensures the security of the investors by enforcing some rules and regulations. This helps you invest in money markets more confidently. 

Also Read: Mutual Fund History

How to Invest in Mutual Funds Online?

If you prefer the digital route and want to know how to invest in mutual funds, you have the following options:

• Create an Account on the AMC’s Official Website

Every Asset Management Company (AMC) has their own website. After comparing the most suitable option, you can register for it. After entering your details and completing KYC verification, you can begin your journey. There are many payment modes available for you to start investing. 

• Download an AMC-provided App

Another way to invest in mutual funds easily is to register on the AMC’s or brokerage’s app. You can choose from multiple options and invest easily on the go. The process also requires you to enter your personal details, complete the KYC process and get started. 

How to Buy Mutual Funds Offline

While online methods are more popular, follow these steps to invest in mutual funds offline.  

• Step 1: Choose Your AMC

Before choosing a scheme and learning the steps to invest in a mutual fund, choose a suitable AMC based on past performance, history and reputation. Checking the experience of fund managers and the expense ratio are crucial steps. 

• Step 2: Complete KYC Documentation

KYC verification is a one-time process, where you will have to submit the required documents that the AMC asks for. A verification process will follow, and after that, you can start investing.

• Step 3: Find a Suitable Scheme

Start by analysing your needs, and consider these aspects:

• Investment goals 
• Risk appetite
• Investment period

If you want to invest for long-term goals, consider equity-related schemes. Bonds may be the best if your risk appetite is low. 

• Step 4: Apply 

To apply for the scheme you have chosen, you will need to follow these steps:

• Visit the AMC office
• Fill out the physical form
• Complete the KYC process and check on the need for FATCA or CRS UBO
• Share your bank details
• Register your nominee

• Step 5: Complete the Payment

The final step is to complete the payment, and for that, you will have to choose a mode like bank cheques or online transactions. Once you have completed it, your AMC will share an account statement with you which is known as CAS (Consolidated Account Statement).

MF investments are widely available and may offer better growth when invested for longer periods. If you have a need for funds during this time, you can pledge your investment to apply for a Fibe Loan Against Mutual Funds. This is one of the quickest ways to access funds without liquidating your investment. Apply now, and you can get up to ₹10 lakhs within the next few minutes!

FAQs on Steps to Apply for Mutual Funds

Where should beginners invest in mutual funds?

If you are new to the world of mutual funds, you can explore ELSS to save tax and earn higher returns or balanced funds to reduce your risk exposure and earn good returns. 

How can I add nominees to my mutual funds online?

Follow these steps to add your nominee to your fund scheme online:

• Log in to your demat account
• Go to ‘Manage My Account’
• Select ‘Add Nominee’
• Fill out the mandated details
• Review the information
• Submit the application

Is a Demat account necessary for investing in mutual funds?

A Demat account is one among several popular ways to invest in mutual funds. While it is not a mandatory option, it does offer benefits like easy management and a single platform for all your investments. 

How can I check the status of my mutual fund using the folio number?

You can use many ways to check your mutual funds status. These options are:

• Online account
• Consolidate account statement
• AMC website
• Mobile app

What is the process to check the status of a mutual fund?

You can go for any of the following processes to check your mutual fund status: 

Contact your MF broker to know the status

Visit your AMC website and access details like transaction history, fund balance, etc.

Find the customer care number of your AMC and share your details to know the status