I started SIPs through a broker three years ago. Is it possible to make direct SIP through the AMC online? I don't want to involve any broker.
-Dheeraj Saxena
It is wise to invest directly as you will save on distribution expenses or commissions which are paid out of your money to distributors. As most fund houses facilitate online investments, you can choose a good fund and invest through SIPs online.
Before investing online, one needs to have a folio number with the particular AMC. Since you are an existing investor, you would already have the Folio PIN. This number is given after one clears the KYC norms. Also, if you plan to invest online with a fund house you have not dealt with earlier, and completed KYC formalities prior to January 2012, you need to complete an 'In Person Verification' (IPV) for future investments. IPV is now a part of KYC clearance.
While investing online, the SIP facility can be availed by either of the following options:
a) Electronic Clearing Service (ECS) or Direct Debit mandate, wherein the investor will have to give a debit mandate along with one signed cheque from his Savings Bank account
b) Standing instruction on selected bank account
c) Issuing Post-Dated Cheques (PDCs) for tenure of the SIP
After you fill the online SIP application, the AMC will mail the same back to you. These documents have to be printed and signed by you. Along with this you need to sign and attach the relevant SIP payment instrument and post it to the indicated Service Centre of the AMC. The SIP will be processed only after verification of all documents.
You can stop your current SIPs in the existing plan and once they are old enough to not attract any tax or load, move them to the direct plan as well.
This article was originally published on May 08, 2013.
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