How to buy mutual funds? Online vs Offline

In your quest to know more about mutual funds, you would have come across questions such as ‘What is a mutual fund?’, ‘What are the types of mutual funds?’ etc.

You would have also explored various mutual fund options to invest in. Are you set to make your investment debut with mutual funds? There are two ways to invest in direct mutual funds. You can buy mutual funds either online or offline.

A tech-savvy, online method is always a more convenient, quick and easy way to buy mutual funds. However, to some, the offline mode might be more suitable.

Both, online and offline methods to buy mutual funds are discussed as follows:

  • Offline Method

If you opt to invest through the conventional process of purchasing mutual funds offline, here are some tips:

  • You can start by seeking a financial advisor in your nearby locality. You can also collect an application form from your chosen Asset Management Company’s (AMC) office, bank, or through the point of sale of registrars like Karvy, CAMS etc.
  • Procure the KYC (Know Your Customer) form from your chosen online centre.
  • Complete your KYC by filling in your personal identification and residential details, along with proof.
  • You can attach relevant copies of your proof along with a demand draft or a cheque, mentioning the desired payment amount. You would need to self-attest the copies of your proof.
  • Submit the form, along with relevant documents, passport-size photographs, and the cheque/demand draft, to the point of acceptance of your chosen organisation. Also, it would help if you carried the originals for verification.
  • You will receive a folio number for your purchase, along with an account statement of your transaction.

For buying mutual funds offline, you need to visit your AMC, bank, registrar office etc. as and when you wish to make a transaction. Your payment through cheque/demand draft is not immediate. It takes time to process, and the values of assets might change till then. This makes the offline method a complex and tedious one. However, all these hassles are absent when you buy mutual funds online.

  • Online Method

If you are planning to buy mutual funds online, you can refer to the following steps:

  • Visit the website of the mutual fund scheme of your choice. You can also visit the website of registrars like Karvy, CAMS, etc. You can also buy mutual funds through the website of various investment portals or banks.
  • First, you need to register yourself with your chosen fund house, bank, registrar office etc.
  • Before you invest in mutual funds online, you need to complete the online KYC procedure.
  • You can attach soft copies of your personal identification as well as residential proofs, online.
  • Next, you can choose your desired mutual fund scheme, and fill-in other investment details.
  • After entering all the details, you can visit the transaction page and choose your preferred mode of payment. This is a vital benefit in deciding to buy mutual funds online.
  • You can choose a convenient payment method, verify and complete your transaction.
  • You will receive a Transaction Reference Number (TRN) after your transaction is processed.
  • You can also check the details of your transaction later in your online account statement.

One of the most important benefits of the online method is that it is less time consuming, and convenient. You can explore, choose and transact at your comfort. Further, the payments are quicker than the offline option. Therefore, you can be assured that you are buying the right fund at the right price. All these benefits make the online method more popular and convenient than the offline one.

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