Mutual funds are fast becoming a very lucrative way of investing money. In this era of digitalisation, it is becoming easier day by day to start investing in the stock market. There are many ways through which an investor can buy a mutual fund. We will discuss this more in this blog and also discuss whether having a demat account for mutual funds is necessary.
A mutual fund is an investment strategy where the investors pool their money and then invest it in various bonds, stocks, other securities, etc. It is managed by a professional who is known as the Fund Manager. Investing in mutual funds helps investors diversify their portfolios, which in turn helps them lower the risks. The investor can open or use his demat account for mutual funds investments or invest directly through the AMC.
The fund manager guides the investors towards making the best decisions as these managers have relevant experience in this field. This manager takes the investment decisions for all the funds which he manages.
There are many different types of mutual funds. To know more about Mutual Funds, read our blog - Mutual Funds For Beginners
The dematerialised account, often known as a Demat account, is an account where the investors can hold their share certificates and other securities digitally without risk of theft, tear or any damage. The demat account holds share certificates, government securities, ETFs, bonds, Mutual Funds, etc., making it easier for the investor to handle.
You can easily open a Demat account with us at Lakshmishree. After doing all the necessary procedures, you can easily access all the documents from your laptop or mobile phone.
There are various benefits of Demat account. Some of them are -
Know more details about a Demat account, click here to read this blog- What is a Demat Account.
There are many ways through which an investor can invest in a mutual fund. Some of them are:
Opening a demat account for mutual funds is one of the ways through which mutual fund investments can take place. We have discussed the meaning of the demat account in the previous section. If you don't have a Demat account, you can open it easily with us at Lakshmishree and start investing.
To open a Demat account, the investor must submit the application form and must have all the essential KYC documents, which DP will further verify, and then your application will be approved.
Investors can also choose an independent portal for investing in mutual funds. If he decides the way through a portal, he has a chance to manage all of his mutual fund schemes at the same time and through the same account. But you need to be aware of the present scammers and thoroughly research the authenticity of the portal you are looking to invest your money.
The investor can also directly invest in mutual funds through the company itself by visiting the asset management company’s website and completing the registration process. The Asset Management Company invests the money in various securities.
After choosing the fund in which you want to invest, it is required that the investor must complete his application and submit the Pan Card and KYC documents. The investor is also required to visit the branch of the AMC physically.
Some of the banks also offer their customers the service of investing in mutual funds. If the investors use the bank, he has the option of using online banking services for investment which will be linked with the bank account number.
We at Lakshmishree Investments provide mutual fund services to our clients. Shree MF is an app for a mutual fund that can be downloaded from the play store and iOS platform very easily. The investor can sign up digitally and create his own watchlist. With the use of this app, the investor can select the fund in which he wants to apply and also monitor them regularly.
We also have experts in mutual funds with whom you can connect, and they will guide you through the processes.
Mutual funds are becoming an investment option for upcoming investors. These investors want to invest part of their capital either through SIP or a Mutual Fund. A demat account is not necessary for investing in a mutual fund, but having a demat account for mutual funds makes it accessible for investors to check on their investments.
It is your choice to invest by opening a demat account for mutual funds, but if you prefer this choice, you can manage your investments safely. If you don’t have a demat account, open one with us at Lakshmishree and start investing.
An investor can sell his mutual fund whenever he sees fit or needs to liquidate his money. When the mutual fund is sold, the investor must follow the tax laws that are relevant depending on the fund.
Mutual Funds and SIPs are similar in many ways. The main difference between the two is that mutual funds involve an investment in lumpsum form. At the same time, SIP is a recurring investment in which the investor can invest any amount daily, monthly or quarterly at his convenience.
One of the significant benefits of Mutual funds is that they are managed by professional fund managers with experience managing money. Another main benefit the investors get while investing in a mutual fund is that it helps the investor gets the opportunity to diversify their investment.
Before choosing a mutual fund for investment, the investor should decide how much risk he is willing to take and the time for which he wants to invest. To know more about the parameters that are needed to be seen for investing in mutual funds, read our previous blog - How to select mutual funds for Investment in India?
