How to Invest in Mutual Funds

Posted on: 20 Dec, 2023

There are various ways to invest in mutual funds. But the investing process essentially boils down to completing an application form required for collecting necessary information and record-keeping, submitting required documents, and sending your investment amount to the desired mutual fund's bank account.

In the case of close-ended mutual funds, since units are issued only at the time of the initial offer, investors can’t buy units directly from the fund after the initial offer. Instead, investors owning the units can trade them on the stock exchange, where others can buy or sell these units at a premium or discount to the fund’s NAV (unit price).

Information Needed for Investing in Mutual Funds:

  • National Identity Card (also called NID)
  • Bank Account
  • BO Account

Additionally, while an E-Tin Certificate is not mandatory, it is highly recommended, as the inclusion of an E-Tin Certificate will ensure a lower tax rate at source (10% vs. 15%) for any dividends.

In general, one can invest in mutual funds in the following ways:

  • Investing through Online Platforms: Most mutual fund providers these days have online portals through which anyone can invest in mutual funds with just a few clicks and without any hassle. These portals typically automatically set up your BO account if you haven’t opened it yet and also provide you with the convenience of having your application form automatically filled out by pulling data from your NID, E-Tin Certificate, and bank account. Many mutual fund distributors these days also have online platforms where anyone can invest in mutual funds digitally.

Click here to see our online investing platform.

  • Investing Directly through the Mutual Fund Provider: There’s also always the old option of visiting the mutual fund provider’s office and investing in their fund(s) by physically filling out the application form.

Finally, in terms of execution, one can invest in two ways:

  • Lump Sums: One-time investments
  • Systematic Investment Plan (SIP): An investment scheme through which an investor make equal payments into a mutual fund at fixed intervals over a period

To see whether SIP or Lump Sum (one-time investment) is right for you, you may see this post.

To learn more about mutual funds, you may read our guide on mutual fund investing.

Click here to explore our mutual funds.

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  • Mutual Fund, Investing, Systematic Investment Plan, SIP, Investing Process