Article

Procedure: How to Invest in a Mutual Fund
February 06 , 2013
  1. What is expressed as a simple phrase here, is probably the most difficult step of all! Arriving at a good fund to invest in, is both a science and an art. Nothing like doing a bit of research and reading yourself, to help you with this
  2. Make sure that the fund you have selected is suitable to your requirements and risk appetite
  3. If investing in Systematic Investment Plans, make sure the fund you have chosen allows this option
  1. Application forms are available for download from the fund website. You can also get a physical form at your broker's place
  2. All you need to complete your application form is to put down your name, date-of-birth, address and bank details. You should also complete details of your investment (cheque number, amount, scheme name)
  3. Make sure you attach a copy of your PAN card in all cases and your KYC verification sheet
  4. Some people have the habit of having their broker fill the form. This is fine, provided you look through it thoroughly after it is filled. Do not sign blank forms or cheques
  1. Cheque is the best way to pay for the investment or first instalment. Auto debit or standing instructions can be used for subsequent instalments in case of SIP
  2. The name to be written on the cheque is typically given in the application form or prospectus
  1. You can deposit the form in the nearest office of the mutual fund you are investing in
  2. Alternately, a service centre of CAMS (in case of HDFC, ICICI, SBI, Birla, DSPBR, IDFC, Kotak, TATA, Canara, ING, L&T, Sundaram mutual funds ) or Karvy (in case of Reliance, UTI, Axis, Religare, JM mutual funds) can execute your investments and other transactions
  3. You can also hand over forms to your broker. However, in such a case, make sure your application form and cheque are fully filled. Never leave anything for the broker to fill in your absence!
  4. If you are really finicky about getting a particular day's NAV, you need to deposit liquid schemes by 12 noon and others by 3pm of that working day. Other investors can ignore this point
  1. In the website of the mutual fund, or with the broker, you will find transaction slips that allow you to make subsequent transactions in the funds  redemption, switch, bank account change, etc
  2. In your own interest, you should quote your folio number if making subsequent transactions in a fund. The fewer folios you have, the easier is your portfolio to manage.

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