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  • Category: Mutual Funds

    Is it good to invest directly online in a Mutual Fund?

    Want to know if it is better to invest in a mutual fund through the online mode? Browse through the opinions provided at this Ask Expert page to know if it is better to invest via an agent or thought online means.

    Generally we used to invest in mutual fund by some advisor/agent. Recently I heard that online investment is also available and that is having more price compared to indirect investment, likely because the Agent commission is bypassed and we need to invest directly from mutual fund website. So is it good to do that or it is good to do through agent only?
  • #138128
    If you can do some homework on the different Mutual Funds or the different Funds of the particular MF, then it is better to invest directly. However, if you are just a beginner and you do not know about various funds and various options available, then it is suggested you take help of an agent.
    The only issue with an agent is , he will promote products from which he gets more commission. Moreover, not all agents give after sales service properly.
    In that regard, I would suggest that , if you want to be a regular investor and you may need regular help and advice, better you approach some established , reputed financial agency firms.You will be getting their service even if one person leaves the firm. By regular contact , they may be in a position to give proper suggestions tailor made to your needs.

    But if it is just random investments, then it is okay to do it by yourselves online.

  • #138132
    Investment into mutual funds should be done directly unless you are not aware of how to do just that. Most of the people these days make use of the bank or the sites like fundsindia. Those places can be good too. As they help you with the funds selection process.

    Direct investment cuts the commission trail of other recommendation agents. And this way you save a lot of money in the process. However do note that when the people are using other means to get suggestion, they compensate for that free advice using commission.

    If you know how to invest into funds from official fundhouse. And if you know how to choose the right fund out of all the options available. In such case you have to go on your own way with direct investment. Otherwise get help from others and choose the right fund for your investment. Most likely that is going to help you get better options in terms of funds.

  • #138194
    Of course, investment for the mutual fund can be done directly thereby saving the commission which we would have offered to the agents in case of their consultation. But such investments may prove to be risky ones' if one lacks proper experience in this line.
    To be familiar with the investment procedures, there are a lot of magazines and periodicals with which you can enrich your knowledge. Economics Times released by Times of India group would also be helpful provided you go through it regularly.
    In case, you are a preoccupied with some having less time to track the movement of mutual - fund share, you may take the help of agents though they may charge some fee as commission but in that way, there would be less chance of loss of your hard earned money in case of selection of wrong choice of share.

  • #138584
    When an investor invests in a mutual fund's direct plan, he/she deals with the Asset Management Company (AMC) directly, while in a regular plan, the investor invests through a distributor or advisor. AMCs generally pay some upfront fee to the agents for their services. Now, investors can avoid paying these commissions and it will translate into more returns every year. The difference in returns is expected to be around 0.50% p.a which could be substantial for large amount over a period of years.

    If an investor is clear about his/her goal and the time-horizon, he/she must do a little bit of research (maximum 30 minutes), check the mutual fund websites and invest in direct plan of his/her chosen scheme. He/she can invest online and get an additional 0.50% p.a return by investing in direct plan.

    Beware! I question everything and everybody.

  • #141276
    If you have a demat account in a bank or a depository participant, applying online for MF is the best thing as it avoids the unnecessary hassles of filling of manual forms and chasing the agents for follow up.
    Once applied online and received in your demat account, you can see all the details online inside your demat account and it becomes very convenient to handle the portfolio. Selling of MF units is also so easy online that you sell today and the money will be credited to your bank account in a few days ( generally 3 days).
    Additionally you will be saving some amount towards agents fee or brokerage which is levied in case of manual applying. Some of the fund schemes have even different NAVs for direct online and manual modes.
    It is definitely preferable to invest online for MFs.

    Knowledge is power.

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