documents needed to invest in a mutual fund

What are the documents needed to invest in a mutual fund?

Purchasing a mutual fund is fairly simple; you can even do it quickly online! It does, however, have paperwork, just like any other financial transaction. Here is a list of documents required for mutual fund investments in India.

Documents you need 

The list of documents needed to invest in a mutual fund is as follows:

1. Application form

  • For a mutual fund, you might need to submit more than one application. A mutual fund account must first be opened, a SIP plan within the fund must be chosen, and an  Electronic Clearing System (ECS) form must be completed if you want to make an electronic transfer from your bank account. Other forms, such as a Risk Profile form, may be requested by some asset management firms.

2. KYC compliance

  • To invest in mutual funds, your PAN must be validated by the Know Your Customer (KYC) regulations of the Government of India. Through the CDSL Ventures Limited website, you may assess your KYC compliance or sign up for it (CVL). The KYC acknowledgment letter or a copy of the KYC-compliance page must be sent if you are currently KYC-compliant. If not, keep the necessary paperwork on hand:
  • KYC individual form
  • Passport-sized photograph

3. Proof of identity

As identification documentation, any of the following is acceptable:

  • PAN with photograph
  • Aadhaar
  • Passport
  • Voter’s ID card
  • Driving license

4. Proof of address 

You can provide any of the following documentation as evidence of address:

  • Aadhaar
  • Driving license
  • Passport
  • Voter’s ID card
  • Ration card
  • Registered lease/sale agreement of residence
  • Flat maintenance bill
  • Insurance copy
  • Utility bills that are less than three months old, such as a landline phone bill, an electricity bill, or a gas bill

It is also appropriate to provide proof of address in the spouse’s name.

5. Third-party declaration for minors 

Parents may invest on their child’s behalf if they are a minor. For this, a third-party declaration form must be completed. For non-individuals, such as businesses, trusts, partnership firms, Hindu United Families (HUF), etc.

The following documents must also be prepared in addition to or in place of those mentioned above. Once you have the necessary paperwork on hand, you can open a mutual fund account and select a fund that matches your risk tolerance and financial objectives.

6. Canceled blank cheque

Contrary to the past, there is no longer a need to provide a blank canceled check. Still, it’s preferable to present a canceled check if you want to simplify your SIPs.

This will provide your fund house access to your account number, MICR code, and IFSC code, as well as allow you to swiftly issue an Electronic Clearing System (ECS) to your bank.

If you are investing in mutual funds online, you do not need to provide a voided check.

What are the documents needed to invest in a mutual fund

Investing in mutual funds on EduFund App

  • Compared to offline investment, online investing will be much faster and easier. By downloading the App, you may select a mutual fund that fits your aims. You can invest in over 4000 mutual funds and personally designed EduCases to create the corpus you need for your child’s future.
  • When the OTP is ready, enter the necessary data and wait for it to appear on your registered cellphone number. You may then input the amount and select whether you want to invest via SIP or lump sum after that.
  • Using your UPI ID or internet banking are your two choices for completing the transaction. This is common practice for the majority of fund companies. If you wish to invest in a couple of each fund house’s programs, you must register on their websites.
  • You can invest in a variety of mutual fund plans from several asset management firms all in one place on the  EduFund App. You can make small investments like Rs. 100, 500, or 2000 in lumpsum or SIP orders. Additionally, you may consult financial professionals through the app, who can direct you toward the best investment opportunities based on your risk tolerance and investing philosophy.

Factors to consider before investing in mutual funds

As you start making mutual fund investments, you must strictly monitor the following:

  • When investing in mutual funds, you must rigorously take your risk tolerance into account. For instance, it is suggested that you start with investing in debt mutual funds since they carry less risk if you cannot afford to incur much risk with your assets. On the other hand, equities mutual funds should be your pick if you have larger risk tolerance.
  • When investing in mutual funds, it’s crucial to take your acceptable investment horizon into account. Consider investing in long-term equity funds, which produce larger returns over the long run. 
  • If your objective is to save for your retirement level of risk appetite will directly affect the results of your mutual fund investments. It has been shown that a larger risk appetite will often result in higher returns.

Since its inception, the mutual fund industry has made a concerted effort to draw in more investors. It used to be a tedious procedure to finish the paperwork for mutual fund investments, and you had to visit an AMC or RTA office to do your KYC.

But all of these annoyances have been eliminated owing to the development of technology.

Consult an expert advisor to get the right plan

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