How to start investing in a direct plan online? Can I convert my regular plan into a direct plan?
- Manoj Tewari
You can visit the website of the AMC and start the process of investing in a direct plan. You could register with the AMC's own portal and invest through it or submit your applications at registrars of fund houses such as CAMS and Karvy. You must ensure that you have mentioned 'direct' in the application form.
Yes, you can switch from a regular plan to a direct plan. Such a switch will reduce your annual expenses and improve your returns from the fund. But switching from regular plan to direct plan will attract exit load as given below:
If you invested through a distributor, any switch-out of these units from Existing Plan to Direct Plan of the same or other scheme shall be subject to applicable exit load, if any.
If you invested without any distributor code, then exit load will not be levied on switch-out of units from Existing Plan to Direct Plan of the same Scheme.
In case of SIPs under both these funds, you will incur an exit load on investments which have not yet completed one year. A better option would be to stop these SIPs by signing a simple 'SIP Stop Request Form' and begin a new SIP directly with the two schemes under their Direct Plans. You can switch/withdraw older investments when they complete one year. This way you will save on exit charges.
You should also remember that switching will also attract short-term/long-term capital gains tax, depending on your investment period.
For more information, read: All About Going Direct.
This article was originally published on December 21, 2015.
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