How to buy mutual funds

Investing in mutual fund has been gaining popularity over the decade. This is because of the built-in-diversification, professional management, a wide range of funds to choose from and the ease of buying and selling this fund. When one is investing in mutual funds, his/her money are combined in with other investors money with the vision for creating large funds which can be invested and result in favorable incomes. When individuals invest in mutual funds, an investor is not mandated to clearly understand how to manage the investment. The professionals will do this for you. Mutual funds can be bought through banks, investment firms, trust companies, financial planning firms among others. Investors also have a wide range of funds to choose from.

For new investors, it is essential to clearly know the investment procedure. The following is a description of how you invest in mutual funds.

One can invest in mutual funds through online platform or through a financial intermediary e. g any branch of the mutual company or even a financial intermediary. Financial intermediary can either be a bank, third payer distributor, brokerage or IFAs. IFAs stands for individual financial advisor who are certified by ARN holders. They can suggest a balance portfolio, which is suitable for risk appetite for every investor. When investing in mutual funds; there are a few steps to follow. First, you will have to decide whether to invest in online or offline. Despite which method you select you will have to have the following documents: PAN card, Photograph, Address proff ,KYC compliance and account details. The following is a description of investing both online and offline.

Investing Online

You should visit the website and register for online transaction service. During this phase , you will have to provide necessary information e.g. Folio number , mobile registered with the folio number , and email id. The F-pin will then be generated and sent to your email and on the mobile registered with the folio. You will then use this F-pin to create a user ID and your password. Lastly you will login using your password and user ID and start investing.

Investing offline

When investing offline, you will first contact an agent of the mutual fund or a distributor. This person will issue you with an application form. You will fill this form by providing the necessary information which includes: address, name, mobile number among others. After you have filled the forms in the right manner, you will have to attach copies of relevant documents and also the cheque before submitting them to the distributor or the agent of mutual funds. The distributor or agent will then send the relevant document to the mutual fund company. The concern mutual fund company will then allocate you a folio number for the particular investment and issue you an account statement.

An investor should select the most suited way according to them.