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.

  1. I have been investing online using HDFC bank Investment account. This account is integrated with the savings accounts. The choice of funds and ease of use is good. However I fee there are still issues as follows. The main reason for going online was to have a hassle free transaction . Sadly thats not the case because of following reasons.

    1. I have painfully completed KYC compliance with CVL and also updated my online broker (HDFC bank) about the same. Even after this fund houses show my KYC status as not verified. Only DSP Blackrock shows my status as verified and ironically HDFC fund house shows not verified.
    I dont understand why fund houses cannot check the KYC status themselves from CVL. If DSP black rock can do this why cant other fund houses?.

    2. Nomination is missing in my case. Again Online broker should have passed this information to respective fundhouse.

  2. i actually hate to admit this,but i withdrew all the money in Birla sunlife equity fund -which was doing a pretty good job,mainly because they refused to correct the spelling mistake they made 4 years back inspite of tens of reminders.i wasnt going to go to a court and get an affidavit for a mistake they made.i let their managers know what i felt about their backoffice/customer service as well.
    it feels foolish to let go of such a good fund.but i didnt want to risk the corpus growing large and then facing problems.because of direct deposit of redemption,there was no problem in redeeming the money luckily

  3. Pravin it is not so stupid to withdraw. If something had happened to you your nominee would have gone from pillar to post. Good that you withdraw. Without naming any amc – they believe that performance is everything. Good performance by a fund manager cannot be license for the back office to treat us badly. Recently I met an IFA who shifted Rs. 100 lakhs of aum from a large fund house to another large fund house. This was because one of his client’s redemption requested was botched up very badly. Even going to the top of the fund house did not help (LOL, it is a very well performing fund, but as usual very, very arrogant). Scream, scream and scream loudly if you want good service. Ask clients to stay away from amcs which give poor service.

  4. I had experience similar to that of Pravin.Sundaram Select Midcap (admittedly well performing fund), changed my Bank to HDFC Bank and started crediting dividends in that account, while the fact is I do not have an account with HDFC Bank.I was shuttled between AMC Office, CAMS office,websites, Call Centers for over a year.After rectification, I made redemption and resolved not to invest in Sundaram again.

  5. Subra, I really think you should write about online MF investing also.
    Recently lot of online MF investing services are coming up like
    fundsindia.com n all.

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