Direct mutual funds are no-commission versions of regular mutual fund plans. With them, you can save up to 1-1.5% per year. Aside from the commissions, the schemes are exactly the same in all other aspects. The only reason they are zero-commission is that you need to buy it from the mutual fund directly or through certain aggregators (such as Jama). If you buy funds through brokers, distributors or agents (both online or offline), they will charge you a commission. So what’s the best way to invest in direct mutual funds?
Invest in direct mutual funds
| Option | Comment |
| AMC Website | BUT you’ll need to go separately to each AMC to make an investment |
| MF Utility | BUT there’s a lot of paperwork and you won’t get any recommendations or intelligence on your investments |
| CAMS or Karvy | BUT there’s a lot of paperwork and you won’t get any recommendations or intelligence on your investments |
| An online aggregator like Jama | YOU’LL get investment recommendations, a portfolio tracker and a paperless experience |
Where can you buy direct mutual funds?
1.AMC website:
You can buy direct mutual funds on the websites of all the AMCs. If you wish to invest in a scheme of ICICI Prudential, you can log on to its website and purchase (both lump sum or set up a SIP). But this also means that if you wish to buy a scheme of Birla Sun Life, that you would need to go separately to its website and purchase the fund. This is, therefore, time-consuming and inconvenient.
2. AMC branch:
The same problem as purchasing on the AMC website, but much worse, as you need to go to each AMC branch separately and do all the paperwork.
3.Through MF Utility:
The AMCs themselves have set up MF Utility, a basic portal where mutual funds can be purchased. The big drawback with MF Utility is that it’s a sort of no-frills platform, with no recommendations or comparative features. After all, the competitors have come together to set it up. Also, getting started involves a lot of paperwork.
4.Through CAMS or Karvy:
Investing through CAMS or Karvy is actually no different than an investment through MF Utility. You won’t get any recommendations as they are both Registrar and Transfer Agents, with ties to every mutual fund house.
While options (1) and (2) are not really worthwhile for anybody, options (3) and (4) are lacking, in that there is a lot of paperwork involved, it doesn’t offer anything in terms of intelligence. This is why an online aggregator like Jama is the way to go.
5. Jama:
An online aggregator like Jama offers several advantages over your other options.
- Switch in minutes: You can switch your entire portfolio to direct mutual funds in minutes through an automated process we have set up.
- Mutual fund universe: We feature over 2000 direct mutual funds, from debt to equity to balanced. We have them all covered, no matter where you wish to invest.
- Completely paperless: Unlike the above options, and even all other aggregators, we offer a completely seamless, paperless experience. If you’re new to investing, we can even ensure your KYC is done.
- Recommendations: Our Robo-advisor intelligently allows picks funds to suit your financial goals. No more relying on a biased agent. The best picks are available within the app.
- Minimal charges: You pay Jama zero commissions and there are no transaction charges, either. In fact, you can have a portfolio of up to Rs. 50,000 and pay us nothing at all. From then on, it’s just Rs. 499 per year.
- Tax reports: At the end of the year, we’ll send you all the tax reports you need to file your taxes.
Conclusion
To sum up, the best place to buy direct mutual funds online is a trusted online platform that is fully paperless, provides super convenience (mobile app, web app, call center, email service), has e-KYC for new investors, selects good funds to invest in, tracks their performance, can provide timely advice if needed, and one who is in for the long haul. One place where you can manage all your fund holdings.
If you are up to it, give JAMA a spin. First 50,000 investment is free.