How can I invest directly in mutual funds?

A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.

Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.

The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.

How can I invest directly in mutual funds?

You can invest directly in a mutual fund offline or online, if your KYC is complete. If you feel uncomfortable transacting online, you can invest in a fund by visiting the nearest branch.

Online is the most convenient way to invest directly in mutual fund schemes, and you can also save on fees. You can invest online through a fund’s website or its RTA site or a fintech platform Investing directly on a fund’s website requires you to manage multiple logins.

Investing in a direct plan means taking responsibility for creating a financial plan, choosing the most appropriate funds for your goals, regularly monitoring the portfolio to rebalance it if necessary. Not everyone has enough knowledge about mutual funds to choose the right funds and manage the portfolio. So Direct Plan is meant for investors who can manage it with ease. Otherwise, investing through a distributor is advisable for those who have insufficient knowledge of mutual funds.

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