Well depends on whom you listen to!
There are many options about how to invest in a mutual fund. Let us see some of the broad options:
1. Online or 2. Offline
The options in offline are –
a) You go to a mutual fund house branch, fill the form and rest assured that things will go fine. or
b) You choose a known IFA who will come home, fill the form, complete the documentation and you do not need to bother about anything else. Once you receive the statement, preserve it. Even if you were to lose it, most asset management companies can search with your Pan card – so not too much of a bother even if you were to lose the printed statement that you have received.
In both the cases as soon as you receive the statement please check whether your name, address, pan number, bank account number are all correctly printed. In 2 out of 5 cases that I see there would be some mistakes.
The kind of mistakes that Asset Management Companies routinely make are:
1. Ramanan is quite likely to become Raman.
2. If you have issued a cheque from State Bank of India, but in the bank details you have given Hdfc bank, there is a good chance that the account numbers will be juxtaposed. Which means your bank will appear with SBI name, but account number of Hdfc is likely to be filled in.
3. Dividend – Growth / Reinvestment – check the options.
4. Check the spelling in the address, name, etc. In case of death, these details could be crucial.
5. Make sure the nomination is mentioned – or write to them and keep the nomination on record.
One extra care: one over smart IFA had made himself the 3rd applicant 🙂 – make sure that it is only in 2 names. Now of course 3rd party cheques are not accepted (which means the agent cannot use your cheque to invest in his name) however he can help himself to be the 3rd applicant, so be careful.
Will soon do a post on how to invest in mutual funds ONLINE.
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