Is there any way where I can invest in mutual fund schemes without payment of brokerage to my broker where I maintain the Demat account? (Currently I am investing through them where they charge me a minimum ₹25 for every transaction. If I opt for SIP then also they charge me brokerage for first 4 instalments.) I want to buy mutual funds in Demat form, but I want to pay no brokerage or very less brokerage. I don't take any advice from my broker.
- Abhishek Udhalikar
You can invest in various mutual fund schemes without payment or brokerage by buying the mutual fund's direct plan. Direct plans can be bought by approaching the branch office of the mutual fund and filling in an application form by yourself. But you can not make the transaction through your Demat account, as the distributor holding your Demat account will also charge brokerage fee or commission. Also, stock exchange platforms necessitate routing transactions through brokers. These platforms can not be used for investing in the direct plans. Therefore, you can buy the direct plans easily and directly from the AMCs website itself and there is no brokerage fee charged for this transaction.
These units are also held in electronic form and you can opt for online statements to avoid paper.
This article was originally published on January 22, 2015.
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