The better way to hold your mutual funds

A staggering 9.34 crore Indians are investing in mutual funds through SIPs (systematic investment plans), according to AMFI's (Association of Mutual Funds in India) July 2024 report. This number reflects an increase in financial awareness and a collective drive towards financial independence. Yet, many investors remain unaware that your mutual fund investments are held in one of two ways - demat or SoA (Statement of Account). SoA is the traditional way of holding mutual fund units. This method lets you interact directly with the fund house to manage your investments. Demat accounts allow you to hold various types of investments, such as stocks, bonds, mutual funds and ETFs (exchange-traded funds), in one place, simplifying tracking and management of your portfolio. However, it's important to understand that a demat account is not required for mutual fund investments. If you are only investing in mutual funds in a demat account, you might be paying unnecessary charges, like account maintenance fees, which could be avoided by opting for a different holding method. So, SoA is better if: You are appr

This article was originally published on September 17, 2024.