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Mobile App to Invest in Direct Mutual Fund

IndianMoney.com Research Team | Posted On Wednesday, September 12,2018, 04:49 PM

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Mobile App to Invest in Direct Mutual Fund

 

 

Investing in mutual funds with the mobile is very convenient. There are several mobile apps to help invest in mutual funds in seconds. Many investors are investing in direct schemes of mutual funds and simply love the ease and convenience, mobile apps offer.

There are a lot of popular mobile apps around like Paytm Money, Groww, Coin, Piggy, Sqrrl and many more. You can invest in direct mutual funds using these apps and save on the expense ratio.

What are direct mutual funds? A direct mutual fund is the exact opposite of a regular plan. When you invest in a regular plan, the mutual fund pays your broker/mutual fund distributor a commission. This increases the cost of investment or you incur a higher total expense ratio (TER). TER is the total cost incurred on investing in a mutual fund scheme.

In a direct mutual fund, you invest directly with the mutual fund house. The Mutual fund doesn’t pay commissions to brokers and you incur lower expense ratio. You save around 0.5% on equity funds, on investing in direct mutual funds vs regular plans.

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Mobile App to invest in Direct Mutual Fund

Want to invest in direct mutual plans? You can invest directly with the mutual fund house through direct mutual funds. There are several mobile apps which help invest in direct mutual funds.

Direct vs Regular Mutual Fund Plans:

If you invest in direct mutual funds instead of regular plans, you can save 0.5% in equity funds and 0.2% in debt funds, over regular plans. This is because the mutual fund house doesn’t pay commissions to brokers and mutual fund distributors.

But, should you invest in direct plans just because of slightly higher returns? You may need the services of a broker, mutual fund distributor or even a financial advisor to invest in mutual funds. In this case, opt for a regular mutual fund plan and avail the services of a financial advisor.

1. How to buy direct mutual funds using mobile app?

Investing in direct mutual funds using mobile apps is really simple. You don’t require any physical documents to be sent over. All you have to do is complete the sign-up process using name, mobile number and email-id. Now, all you have to do is complete the KYC (Know Your Customer) and make the investments. Use the Aadhaar Card and PAN and complete the KYC in a paperless way. Now, enter the PAN in the mobile app and check if you are KYC verified. You then set up the bank account and start investing in direct mutual funds.

What if your PAN is not KYC verified? Well, you have to complete the eKYC process. If you have an Aadhaar Number, eKYC allows UIDAI to disclose personal information to service providers. You can activate your SIM or open a bank account in an instant. This is also called Aadhaar-based OTP verification.

2. Advantages of investing in direct mutual fund

Mobile apps have taken investing in direct mutual funds to another level. You can invest on the go and track and manage your mutual fund portfolio.

  • Get KYC verified and invest in less than 10 minutes.
  • Use mobile apps and invest in a number of direct mutual funds depending on financial goals.
  • Investors in tier-II and tier- III cities can invest in direct mutual funds using mobile apps.

3. Disadvantages of investing in direct mutual fund

  • Mutual fund apps could give biased advice. They tend to use heavy advertisements and promotions.
  • Mutual fund apps give general financial advice, rather than specific advice, which you need to meet financial goals.
  • You have to do your research and cannot depend on mutual fund apps to do this for you.
  • Mobile fund apps give recommendations without accessing risk profile and are not great for novices.
  • Many mobile apps are not updated regularly.

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