How to invest in Direct Mutual Funds? Which platforms are available? Is it safe buying through these platforms? Can we do SIP, Lumpsum? Comparison of the popular Mutual Funds Platforms, ETMoney, PayTM Money, Zerodha Coin, Kuvera, Groww?
Table of Contents
How to buy Mutual Funds Directly?
Regular and Direct Mutual Fund plans are options to buy the same mutual fund scheme, run by the same fund managers who invest in the same stocks and bonds. The major difference between direct plan and a regular plan is that in the case of a regular plan your mutual fund(also known as AMC) pays a commission to your broker whereas, in case of a direct plan, no such commission is paid. On average, you will earn 0.50%-1% more per annum by investing in a mutual fund scheme through its direct plan rather than its regular plan as explained in our article What is the difference between Direct and Regular Mutual Funds?
According to the recent Amfi data, direct mutual fund plans have managed to corner a market share of a little over 40% in the last six years (Ref)
If you have know-how, enough time and discipline to do invest in Mutual Funds by yourself, then you can invest directly in mutual funds. Choosing a fund because of high returns or chasing Mutual Funds last year high returns is not the right approach. You might lose more money in choosing the wrong mutual fund. You need to understand that selection of the right MF scheme goes a long way in determining the final corpus over the long term. So don’t be penny wise and pound foolish. Be aware of tax rules of Mutual Funds.
Note : Switching from Regular to Direct Mutual Fund is similar to exiting from one fund and investing new in the same fund in lump sum. Be aware of Taxation. Explained in our article Switching of Mutual Funds
You can invest directly through a Mutual Fund Website/App. There are 44 mutual fund companies. Each of the Mutual Fund provides website and App to invest directly through them. But you need to open an account with each of the Mutual Fund company. Say if you want to invest in HDFC Equity Fund then you need to open an account with HDFC Mutual Fund. And if you want to invest in ICICI Prudential Bluechip Fund Direct then you need to open account with ICICI Prudential Mutual Fund. You need to open account only once with the mutual fund company. if you want to invest say in HDFC Top 100 fund then you do not need to open the account again. Hence people look for platform which provides most of the Mutual Funds company at one place. We have platforms like ICICIDirect, HDFC Net banking which provided most of the Mutual Fund companies but they charge commission.
There are many Apps/Website available in which you can invest directly into Mutual Funds, other than investing through Mutual Fund(AMC) websites. Some of them are given below(in no specific order).
Note: Whether you invest directly or through genuine platforms, your money goes to Mutual Fund companies. So these apps are safe. You get a Folio number with the Asset Mutual Fund company (which is like Bank account number) and can track your money. Our article What is Folio Number explains it in detail.
Note: Whether you invest directly or through broker, you need to get your KYC done once. All Investors will have to submit their PAN card copy (which serves as Proof of Identity (PoI)) and Proof of Address (PoA).
3. CAMS & Karvy Website/Mobile App: Mutual Funds record agents also called as Registar transfer agents. Who are CAMS, Karvy, RTA or Registrar and Transfer Agent
4. Mutual Fund Utility: What is MF Utility,Buy and Sell through MF Utility
6. Zerodha Coin
7. PayTM Money
8. ETMoney App
Comparison of Direct Mutual Funds Platform: ETMoney, PayTM Money, Zerodha Coin,Kuvera, Groww
We have taken a few important ones(whose names or advertisements we usually come across) and done the comparison as shown in the table below.
Note: Most of these Direct Investing platforms do not have customer service on call or toll-free number in case if you want any clarifications/help. Everything has to be online chat or by mail.
Note: You can invest only in a single name. Not joint say with your spouse.
Review of ETMoney, PayTm Money, Zerodha Coin, Kuvera, Groww
The table below has links to short YouTube Videos on overview of the Direct Mutual Fund platform for you to get feel.
Also Given below are links to PlayStore which you must read to get ideas about the reviews.
|Description||ET Money App||PayTm Money||Zerodha Coin||Kuvera||Groww|
(3 min 42 sec)
(1 min 42 sec)
(2 min 55 sec)
(2 min 33 sec)
|Watch Video on YouTube||YouTube Link||YouTube Link||YouTube Link||YouTube Link||YouTube Link|
|Link to Playstore(Do read the reviews)||ET Money App||PayTm Money||Zerodha Coin||Kuvera||Groww|
Be careful of Direct Investing in Mutual funds
Don’t be penny wise and pound foolish: Eyeing on high returns without planning properly, or worse, no planning may turn out to be dangerous.
For those who do not have the time, knowledge, and patience to keep an eye on their investments it is better to get an experienced advisor and adopt a planned approach.
Don’t end up buying lots of funds as they are just a click away. It will not be diversification but will be diworsification
Don’t move your earlier investments to these platforms in a hurry: If you have done regular investments and move to direct then it would be considered as Switching i.e selling or redemption of your earlier funds and buying of the same fund in a lump sum. Be aware of Taxation. Explained in our article Switching of Mutual Funds
You can cancel your SIP anytime as explained in our article How to cancel a SIP? Can I Stop SIP online? Any charges or Taxes
- Direct Investing in Mutual Funds
- PayTM Money
- Switching of Mutual Funds
- How to cancel a SIP? Can I Stop SIP online? Any charges or Taxes
- Redeeming Mutual Funds : Check Exit Load,Taxes
- Investing in Equities: Stocks vs Mutual Funds
Do you invest directly in Mutual Funds? If yes, which platform do you use? Which platform do you think will last.