Direct Mutual Funds: Offline Investing Strategies And Steps

Direct mutual funds offer a direct avenue for investment without the need for a middleman, such as a broker, and allow investors to deal directly with the company that manages the fund. This helps investors save on extra middleman charges and gives them greater control and transparency over their investments. To invest in direct mutual funds offline, one must physically fill and submit a mutual fund form. This involves visiting the nearest office of the selected Asset Management Company (AMC) or the registrar office, completing the Know Your Customer (KYC) process, and submitting the necessary documents, such as a self-attested PAN copy, address proof, and a Common Application Form or SIP Form.

Visit the fund house or registrar office

If you're looking to invest in direct mutual funds offline, one way to do so is by visiting the fund house or registrar office. Here's a detailed guide on what you need to do:

• Identify the physical location of the fund house or the registrar and transfer agent (RTA) office associated with the mutual fund you want to invest in. You can usually find this information on the official website of the mutual fund.
• Once you reach the office, request an application form for investing in direct mutual funds. This form will contain essential details and terms related to the investment.

Complete the Application Form:

Provide accurate information, including your personal details, investment amount, choice of mutual fund scheme, and mode of investment (lump sum or Systematic Investment Plan - SIP).

Attach KYC Documents:

Submit copies of your Know Your Customer (KYC) documents, typically including a PAN card, address proof, and passport-sized photographs. Some offices may also require additional documents, so it's best to carry self-attested copies of your address proof and identity proof.

Make the Payment:

Make the payment for your investment using a cheque or demand draft. Write the cheque or draft in favour of the mutual fund scheme you are investing in.

Submit the Form:

Submit the completed application form, along with the cheque or demand draft, to the designated collection centre at the fund house or RTA office.

Receive Confirmation:

After processing your application, you will receive a confirmation of your investment. This confirmation will include details such as the number of units allocated and the Net Asset Value (NAV) at which the units were purchased.

Monitor and Review:

Periodically check your physical account statements, which will be mailed to your registered address. Keep track of your investments and review their performance. If needed, you can always visit the fund house or RTA office for assistance or updates.

Remember that offline methods for purchasing direct mutual funds usually require physical visits for actions like redeeming fund units or adjusting SIP amounts.

Collect and fill out the application form

To invest in direct mutual funds offline, you will need to physically visit the nearest office of the Asset Management Company (AMC) whose fund you have selected. Once you reach the centre, you will be asked to complete a Know Your Customer (KYC) process if you are not already KYC-compliant. You can procure the KYC document at the AMC branch.

Along with the KYC form, you will also need to fill out a Common Application Form or a Systematic Investment Plan (SIP) form. If you opt for the SIP route, you will also need to fill out a National Automated Clearing House (NACH) Mandate, which will give the AMC permission to auto-deduct the SIP amount from your linked bank account.

On these forms, you will need to provide details such as your personal information, investment amount, choice of mutual fund scheme, and mode of investment (lump sum or SIP). Make sure to fill out the forms with accurate information and attach copies of your KYC documents, including your PAN card, address proof, and passport-sized photographs, as per the requirements.

Once you have completed and submitted the requisite forms and documents, you will need to submit a cheque or demand draft in favour of the AMC for the desired investment amount.

Attach KYC documents

Know Your Customer (KYC) is a mandatory process in India for investing in mutual funds. It is a background check performed by financial institutions to verify the identity and address of beneficial owners. To complete the KYC process, you will need to submit valid documents as proof of identity and address. Here is a list of acceptable documents:

• Passport
• Driving licence
• Proof of possession of an Aadhaar number
• Voter's Identity Card
• Job Card issued by NREGA
• Letter issued by the National Population Register (NPR) containing name and address details
• Any other document notified by the Central Government in consultation with the Regulator
• PAN Card of the HUF
• Latest bank passbook (not older than 3 months)
• Bank account statement (not older than 3 months)

For companies or bodies corporate, the following additional documents are required:

• Certificate of incorporation
• Memorandum & Articles of Association
• Resolution of the Board of Directors authorizing investment in mutual funds
• Power of Attorney granted to its managers, officers, or employees to transact business (Authorized Signatories List)

For partnership firms:

• Certificate of Registration for registered partnership firms
• Any other officially valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution/authority to invest)

For trusts, foundations, NGOs, charitable bodies, clubs/mutual fund schemes:

• Certificate of Registration for registered trusts
• Any other valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution/authority to invest)
• Offer Document of the Mutual Fund Scheme

Make the payment via cheque or demand draft

Making the payment via cheque or demand draft is a common method when investing in direct mutual funds offline. This process involves physically visiting the nearest office of the Asset Management Company (AMC) whose fund you have selected for investment. Here is a step-by-step guide to making the payment via this offline method:

Visit the AMC Branch:

Firstly, you need to go to the office of the AMC whose fund you have chosen to invest in. This is where you will complete the necessary procedures and submit your investment form and payment.

Complete the KYC Process:

Upon arrival at the AMC branch, you will be required to undergo the Know Your Customer (KYC) process if you are not already KYC-compliant. This process can be completed at the branch, and you will need to provide certain documents, including a self-attested copy of your PAN card and address proof.

Submit the Necessary Forms:

In addition to the KYC documentation, you will also need to fill out and submit a Common Application Form or a Systematic Investment Plan (SIP) form if you choose the SIP route. The SIP form will include a NACH Mandate, authorising the AMC to auto-deduct the SIP amount from your linked bank account.

Make the Payment:

Now, you can make the payment via cheque or demand draft. The payment should be made in favour of the AMC for the desired investment amount. Once the transaction is initiated, you will be allotted a folio number, and you will receive an account statement.

Understand the Process at RTA Offices:

A similar process can be followed at local Registrar and Transfer Agent (RTA) offices. However, it is important to note that offline methods for purchasing direct mutual funds generally require physical visits for any actions related to your investments, such as redeeming fund units or adjusting SIP amounts.

Advantages of Demand Drafts:

Demand drafts offer a secure payment method, particularly for larger sums of money. They are issued by banks and guarantee the availability of funds as the amount is deducted from the purchaser's account in advance. Demand drafts also offer privacy for the payer, as they do not reveal the payer's bank account details to the payee.

Disadvantages of Demand Drafts:

It is important to be aware of the challenges associated with demand drafts. Cancelling a demand draft can be difficult and time-consuming, and there is a risk of delay in receiving funds if encashment is not done on time. Additionally, if the demand draft is lost or stolen, recovering the money may be difficult, and the bank will not be responsible for replacing the funds.

In summary, investing in direct mutual funds offline involves physically submitting forms and making payments via cheque or demand draft at the AMC or RTA office. This method may be preferred by those who value the traditional, in-person approach to investing.

Submit the form and receive confirmation

Once you have filled out the application form, attached the required documents, and made the payment, you will need to submit the form and receive confirmation of your investment.

The submission process involves handing over the completed application form, along with the required documents, to the designated collection center at the fund house or RTA office. The forms and documents can be submitted in person by visiting the nearest office of the selected Asset Management Company (AMC) or the registrar and transfer agent (RTA) associated with the mutual fund.

After submitting the form, you will receive a confirmation of your investment. This confirmation typically includes essential details such as the number of units allocated, the Net Asset Value (NAV) at which the units were purchased, and the folio number for the investments made. The confirmation will be sent to your registered email address or mobile number.

To keep track of your investments, you should regularly check your account statements, which will be mailed to your registered address. These statements provide valuable information about your investments and any changes to your portfolio over time.

It is important to note that offline methods for purchasing direct mutual funds may require physical visits to the branch for actions like redeeming fund units, increasing the SIP amount, or making any other adjustments to your investment.

Frequently asked questions