There are several platforms available that allow investing in direct plans of mutual funds
Direct plans have a lower expense ratio than regular plans, since they do not include brokerage and agent commission fees. Lower expense ratio results in comparatively higher returns over a period of time. Learn more about regular and direct mutual fund plans.
There are several ways to invest in direct plans of mutual funds. Let's take a look at them.
Online platforms such as Groww, Coin by Zerodha, and Upstox help investors invest in a vast array of funds from different fund houses. You can open a trading account within a day by providing identity proof, PAN card and linking the bank account. The KYC is also completed online. The advantage of this method is that investors can use one single account to invest in multiple funds across AMCs. This also helps them to manage their portfolio easily.
Besides the above platforms, we have MF Utilities (MFU). It is a shared platform built with the collaboration of different AMCs. The investor would need to create a Common Account Number (CAN). It is a unique reference number that helps to view the consolidated portfolio. This also helps to invest in direct funds of different AMCs through lumpsum or SIPs.
Investors can also invest online by visiting the AMCs website and opening an account with them. A self-attested copy of your PAN and an address proof are usually required along with the bank details to complete the KYC process. Once that is done, the investor can choose the fund they would like to invest in. Creating an account with a fund's website only allows us to select funds that are available by the AMC. If you wish to invest in different funds across AMCs, then you need to go through the process of opening a new account with each AMC. However, one is not required to go through the KYC process again. It is centralised and needs to be done just once and then investors can invest across AMCs.
Alternatively, if the investor doesn't want to invest online, they can invest offline by visiting the nearest AMC branch. They need to submit their identity and address proof, PAN card, a cancelled cheque with bank account details to get the KYC done. They can then fill up the mutual fund application form or the SIP form depending on the investment mode. In the form, they will have to check the 'Direct' option box to invest directly. After completing this procedure, they will receive a folio number from which they can track their investment.
We recommend investors choose the method that is convenient for them and find a fund that matches their financial goal.
However, opting for a direct plan means that the investor has to take the responsibility of creating a financial plan for themselves. This means selecting a suitable fund that is appropriate for their financial goal and monitoring the investment regularly. If the investor has enough knowledge to find the right fund and manage it by themselves, then the direct plan option is suitable for them.