I want to start investing in mutual funds through online SIP. There are various channel through which I can start an online SIP, like banks, AMCs, brokerage portals etc. My question is which is best channel to start an online SIP?
You can invest through many platforms like banks, agents, brokerage websites and fund houses. However, after the implementation of direct plans from January 2013, it is best to invest in mutual funds directly through the fund house. In this way, you can marginally save your investments from being used for commissions and in turn get higher returns. Money invested through anyone other than AMC, will get invested in regular plan of a fund which has a marginally lower NAV than the direct plan. Compared to regular plans, direct plans are expected to have returns that are 0.4 to 0.7 per cent higher, which can be a considerable amount over a long period.
However, you should invest directly only if you think you can select the right fund for your investment needs. If you think you may require help in managing your investments at a later time you should take the other routes.
Ideally you should choose a fund that matches your investment goals and make direct investments in that, but since you want to make SIP online, you need to look at the fund houses that allow you to invest online and choose a good fund among them.
Although this is not the right approach to achieve your financial goals, but you have ample choice as most large fund houses allow you to invest online. The AMCs that allow you to invest online include Axis, Birla Sun Life, BOI AXA, Canara Robeco, Daiwa, Deutsche, DSP Blackrock, Edelweiss, Franklin Templeton, HDFC, HSBC, ICICI Prudential, IDBI, IDFC, Indiabulls, Kotak, LIC Nomura, L&T, Mirae Asset, Motilal Oswal, Pramerica, Principal, Quantum, Reliance, Religare, Sahara, SBI, Sundaram, Tata, Taurus, Union KBC and UTI.
Some of these fund houses require initial paperwork before giving online access to investors, whereas some allow one to initiate the first investment online. You need to check this for each fund house. Choose a well-rated fund that matches your goal and you are good to go.