Commission to be paid upon investing
in Mutual funds but there is one direct option to save commission.
People want
to invest in mutual funds upon seeing the returns gained by them but it should
be understood first that it requires commission to be paid upon investing in
them. Only one option doesn’t imbibe commission. If taken from bank then also commission
is to be paid. But if this commission is saved then its added into profits to
give increased returns. This is a direct plan which needs to be understood.
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| Commission and ways to invest in Mutual funds |
Mutual funds
are the best and most safe profit bearing investments right now. The portfolio
of investors can become very sound upon investing in mutual funds. It’s also a
good option to be investing for a long time. It’s controlled completely by SEBI
so it’s easier to manage. One also has the ability to change their portfolio
any time and reduce their risks. Still it is seen that small investors have
full control over their investments and so they are well informed about it. In
2008 due to restrictions upon mutual fund entry load and new technology, many
agents had stopped promoting mutual funds but many new ways of selling and
buying them also came into preview in those times.
Ways to invest in Mutual funds-
By Agents – This is the most common way to
invest in mutual funds. In order to become an agent one has to undergo training
and pass the exam and upon which the concerned agent gets the license of a
mutual fund distributer and can start selling various schemes in Mutual Fund
Company. Such agents can be found commonly around us.
AMC Investment Service Center - SEBI(Securities and Exchange Board of India) had regulated a circular in
September 2012 in which there were directions for mutual fund companies to
present a direct plan for their investors. This was in aid of those investors
who wanted to invest without any help of an agent. In this billing is less as
the commission is saved which mutual fund companies give to agents.
CAMS – Cams is the transaction processing
and record keeping agency of various mutual fund companies. One can also invest
in mutual funds directly through Cams office. Registration is required for the
same. To avail online facility one can log to mycams online utility. However
this is only for the Indian investors. The holders can be one or two people so
that upon death others can be benefitted. SIP/SWP/STP are not available in this.
Demat Account – If one has a demat account then
they can take any scheme under it. But it can be used only to invest in regular
plan and not direct plans.
Banks – One can invest in mutual funds
through banks where selling/buying of mutual funds takes place. In this case
bank works as an agent and would also get commission upon your mutual funds.
Online Portals – Nowadays with the availability of
many technological gadgets people themselves invest in mutual funds through
many online portals and are quite used to this idea. One can directly log to MC
website and invest. If this isn’t suited to some then there is also an option
to go on online transaction platforms. For ex: Funds India, which also works as
an agent but it gives one the liberty to buy/sell online and to switch over and
scheme and also helps in taking money out.
#Abhinav Gulechha, RIA, ACA, CFP- personal finance specialized
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