How to invest in mutual funds online

In the 90s, to invest in a mutual fund, you had to submit a cheque. However, this had a high error rate and resolving any issue was a lengthy process. Also, most funds were closed-end funds, which meant redemption was a real headache. Investing was as intimidating as rafting through rapids. To add to that, fund houses would publish NAVs every three months – you’d have no clue if your fund was performing or not. Now cut to today, investing is as easy as buying clothes. You can pick a fund, and with a click on an app, it’ll become your investment. Furthermore, selling is pretty easy, too. It is much easier than selling a second-hand pair of shoes. All you have to do is place a redemption request on the app – that’s it. Mutual fund investing has transformed over the years, meaning you can start your journey right after finishing this article! Why is defining your investment objective the first step? Before you start investing, it’s essential to know why you want to invest. Much like planning a trip, where you decide your itinerary before booking tickets, defining your financial goals is the foundation of your mutual fund investment journey. Ask yourself: Are you saving for wealth creation or retirement planning? Do you need a fund for your child’s education or building an emergency corpus? Each goal comes with its own suitable fund choice. For example, a short-term goal like an emergency fund might warrant debt investments, while long-term wealth creation or retirement demands an exposure to some equity balanced with debt as well. Suggested read: How to build your first mutual fund portfolio the smart way What is the difference between direct and regular mutual fund plans? Once your goals are clear, the next important decision is whether to invest through a direct plan or a regular plan. Direct plans have lower expense ratios because you buy units directly from the Asset Management Company (AMC) without intermediaries. This generally translates to better long-term returns. Regular plans involve distributors or advisors who earn commissions, inc

This article was originally published on May 30, 2025.