An investor who directly invests in a fund will not be charged an entry load. Can you advise me how can I buy and sell mutual funds online? Moreover, if someone invests in a mutual fund on the day the stock market falls significantly and sells on the day it rises, can he makes profit out of that?
-Mukesh Mehrotra
Many asset management companies (AMCs) have started offering the facility to transact online via their websites. For this they have tied up with different banks to offer online transfer of funds. First, you need to ensure that your bank is on the list. Secondly, if you are creating a new folio or investing for the first time with a particular fund house, you would need to send the photo copy of your PAN card (this copy has to be attested by an authorized person). Once done and your folio is created, you can transact freely on the web to buy or sell funds in your folio. Do note that this procedure is applicable to a single fund house. The whole process is to be repeated while investing in a fund of a different fund house.
As to your second question, it is possible to buy and sell funds whenever you wish to. This can be done similarly as buying or selling shares online. The only thing you have to adhere to is the cut off time. Generally, if you successfully transact before 3 pm on a particular day, you would get the same day's NAV. After that time, you would be allotted units according to next business day's NAV. To be safe, check the cut off time on the company's website before investing.
This article was originally published on June 12, 2008.
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