I am new investor and want to know which is the best way to invest in Mutual Funds, through Bank or any investment agency, online through Fundsindia.com, demat account or direct through fund house site.
Which mode is less expensive and better when we sell our units.
After the implementation of Direct Plans from January 2013, it is best to invest in mutual funds directly through the AMC. This will save your investments from being used for commissions and in turn give higher returns.
You could invest through either of the platforms- banks, agents or fundsindia.com, but you should know that banks and agents are paid and upfront commission by the AMC for services rendered by them. They also get some money as trailing commissions. Sebi has mandated banks dealing in mutual funds to disclose the fee they receive. Most banks carry this fee disclosure on there website. Money invested through anyone other than AMC, will get invested in Regular plan of a fund which pays some amount as commissions.
You don't necessarily need a demat account to invest in funds. It is also considered to be the most cumbersome route. Investing directly through AMC is the most cost effective route. Whenever you decide to redeem your investments the prevailing taxes will be deducted and the mode of investment will not make a difference.