For long term wealth creation, mutual funds are recommended to those who are so busy in their job or business and don’t have time to watch the market on daily basis. Or in other words, mutual fund investment is strongly advised to those who do not have stock market knowledge but know that it has potential to give them unexpected returns. Here I will be guiding you how to invest in mutual funds.
When you invest in a mutual fund scheme then on your behalf a well-qualified financial professional takes care of your money and invest it wisely so you can get maximum profit at the time of redemption.
There are variety of mutual funds schemes out there to meet your financial goals. For example, if you are conservative investor and reluctant to take high risk then balance funds are available for you who give 8%-13% returns with minimum risk.
Similarly, if you are young and have courage to take risk then you can think of small-cap or mid-cap funds who have potential to give you higher returns 25% or more (but don’t ignore the risk they carry).
In simple words, there are lots of schemes available to meet your financial needs.
How to invest in mutual funds?
There are different ways available to invest in mutual funds. For example, you can directly visit concerned asset management company’s website and start investing, all banks also offer mutual funds investment through their net banking websites or branches, not limited to this stock market brokers also offer such investments.
What I personally suggest is always consider direct mutual fund investment to save 1% commission charges.
For your knowledge, if you would invest in mutual funds through a commission house or agent then at the time of redemption, you may need to pay 1% commission charges. But when you directly invest then you save this 1% and in long term it is a huge saving.
For direct investment, you can directly visit concerned mutual fund house website and create you account.
I would like to tell you that I don’t recommend this method of direct investment.
Because this way you would end up opening so many accounts. For example let’s say you would like to invest in SBI Blue chip fund scheme. For that purpose, you will be required to open account the the SBI fund house.
Now let’s say you would like to invest in HDFC mutual funds too. Then what you would need to do is you will be required to open another account in HDFC mutual funds.
This way you will end up creating so many account.
What if you I suggest a better way to invest in mutual funds through which you can invest in all schemes with just one account? And the best part is your investment will be considered direct.
So here is the way. You can open your Demat account with Zerodha, No.1 discount broker in India (registered with SEBI).
Zerodha is one of the best trading platforms in India and their client base is more than 9+ million. They are very famous for their services.
Zerodha’s mutual funds platform Zerodha Coin is one of the best options for direct mutual funds investment. It is a one stop shop for all mutual funds schemes.
Here are benefits of Zerodha Account:
- Zero brokerage for mutual funds investment
- Save 1% commission for direct investment
- All famous schemes are available, with one Zerodha account invest in all
- Not limited to this, you can also invest in stocks, bonds, futures and options, derivatives, and commodities
The platform offers free mutual fund investment; they do not charge brokerage for mutual funds investment. And your investment will be considered direct which means you will also save 1% commission.
Here is the video explaining each and every step you need to take to invest in mutual funds.
How to buy mutual funds?
Use the above link to open your mutual fund account with Zerodha. I have published a video on how to open Zerodha account, for help you can watch that video also.
- Once your Zerodha account is opened, install Zerodha Coin app from your smartphone app store.
- Login using your credentials and then use the give options to search a mutual fund scheme you would like to invest in.
- Select the scheme and then choose Buy (for one time lump-sum investment) or SIP (Systematic Investment Plan for monthly investment).
- Enter the amount you would like to invest.
- Then confirm your choice and verify the same.
- That’s it. Just make sure to add the money to your Zerodha account.
That’s it. By following the instructions given above you can invest in mutual funds right from the comfort of your home or office.