Upstox Mutual Funds: A Step-By-Step Guide To Investing

Investing in mutual funds on Upstox is a straightforward process. Upstox is a platform that allows users to purchase mutual funds and reduce the cost of investing. Users can explore over 2,000 schemes, selecting and reviewing funds based on criteria such as the fund start date, expense ratio, and minimum investment amount. The platform offers various investment options, including tax-saving schemes, high-dividend options, and growth-oriented funds. Upstox also provides tools to help users find, study, and understand mutual funds, making it easier to align investments with financial goals. The minimum investment amount for mutual funds on Upstox can range from as low as ₹500 to ₹5,000 or more, depending on the fund. Users can follow a few simple steps to place a Mutual Fund SIP order on the Upstox app, selecting their preferred fund and SIP amount, and making initial payments via Net Banking or UPI.

How to open a mutual fund account on Upstox

To open a mutual fund account on Upstox, you need to follow a few simple steps. Firstly, you need to have a Demat account, which can be opened online with your broker or offline by filling out a form with a brokerage firm or asset management company. Once you have your Demat account, you can visit the Upstox MF platform page to explore their selection of over 2,000 schemes. Here, you can select your preferred fund and review important details such as the fund start date, expense ratio, and minimum investment amount.

Upstox offers a range of investment options, including tax-saving schemes, high-dividend options, and growth-oriented funds. They also provide tools to help you find, study, and understand mutual funds, such as search filters and charting tools to assess potential returns.

If you don't already have a Demat account, you can open one for free on Upstox. To do so, you need to file your KYC (Know Your Customer) or FATCA (Foreign Account Tax Compliance Act) details with an asset management company, intermediary, or central KYC registration agency. You will also need to submit proof of identity, such as an Aadhaar ID, Voter ID, or driving license.

Once you have your Demat account set up, you can start investing in mutual funds. To do so, log in to the Upstox app and go to the Mutual Fund section. From there, you can explore investment ideas and select a fund that aligns with your financial goals. Upstox offers suggestions such as Invest Globally and All Weather Investing to help guide your decision-making.

After selecting a fund, you can choose between a one-time investment or a Systematic Investment Plan (SIP), which allows you to invest a fixed amount at regular intervals. With the SIP option, you can customise the amount and date of your investment and review the order details before proceeding to payment. You will need to make an initial payment via Net Banking or UPI to start your SIP.

By following these steps, you can easily open a mutual fund account and start investing with Upstox, building your wealth over time and working towards your financial goals.

Understanding the different types of mutual funds

There are several types of mutual funds, each with its own unique features, risks, and rewards. Here are some of the most common types:

• Money Market Funds: These funds invest in high-quality, short-term debt instruments and cash equivalents, such as US Treasury bills and certificates of deposit (CDs). They are considered low-risk investments and are often used as a temporary holding place for cash. While the returns are relatively low, they still tend to offer better returns than savings accounts.
• Bond Funds: These funds aim for higher returns by investing in various types of bonds, such as government bonds, corporate bonds, and other debt instruments. The risks and rewards of bond funds can vary significantly depending on the types of bonds they invest in.
• Stock Funds: Stock funds, also known as equity funds, invest in corporate stocks. They can be categorized by the size of the companies they invest in (small-cap, mid-cap, or large-cap) or their investment approach (aggressive growth, income-oriented, or value). Some common types of stock funds include growth funds, income funds, index funds, and sector funds.
• Target Date Funds: These funds hold a mix of stocks, bonds, and other investments, and gradually shift their allocation over time according to a predetermined strategy. They are also known as lifecycle funds and are often used for retirement planning.
• Index Funds: These funds are designed to replicate the performance of a specific market index, such as the S&P 500 or the Dow Jones Industrial Average (DJIA). They have a passive investment strategy and are known for lower costs and better performance compared to actively managed funds.
• Actively Managed Funds: These funds have portfolio managers who actively select investments with the goal of outperforming a benchmark. While they offer the potential for higher returns, they also come with higher fees and active risk.
• Balanced Funds: Also known as asset allocation funds, these funds invest across different types of securities, such as stocks, bonds, money markets, or alternative investments. The goal of balanced funds is to reduce risk through diversification.
• International and Regional Mutual Funds: International funds invest in assets located outside of an investor's home country, while global funds can invest anywhere in the world. Regional funds focus on a specific geographic region, such as a country, continent, or group of countries with similar economic characteristics.
• Socially Responsible Mutual Funds: These funds, also known as ethical funds, invest only in companies and sectors that meet certain criteria. For example, they may exclude industries such as tobacco, alcoholic beverages, weapons, or nuclear power. Sustainable mutual funds focus on green technology and recycling.

How to select a mutual fund

When selecting a mutual fund, it is important to keep in mind that the primary motive of any investment is to get better returns. Investments must be planned to reach financial goals and must be made in accordance with your risk appetite.

Firstly, determine how much you want from your investment at the end of the time period of investment. Plan your investment accordingly to reach these goals. Invest in funds that match your risk appetite. For example, equity-oriented funds offer the prospect of higher returns, but at an increased risk. If you are a conservative investor who can't take much risk, keep your exposure to such funds to a minimum.

A time-tested strategy is to invest a major part of your money in relatively safer funds like large-cap equity funds or debt, with a minor part going to well-performing funds that can offer greater returns at the cost of increased risk. This is called the core-satellite investing strategy.

It is also important not to invest all your money in a single fund, as this puts you at great risk of losing your investment. Instead, diversify and invest in multiple funds. Design an investment strategy and build up a diverse portfolio.

You can use custom criteria search tools to find suitable funds for you from all available funds. Utilize search filters and charting tools to assess potential returns before making a purchase, allowing you to make informed decisions tailored to your financial aspirations.

Some other factors to consider when selecting a mutual fund include the fund start date, expense ratio, and the minimum investment amount for each fund.

How to place an order on the Upstox app

To place an order on the Upstox app, you must first log in and navigate to the Mutual Fund section. From there, you can explore investment ideas and select a Mutual Fund for investment. Once you've chosen a fund, follow these steps:

Placing a simple order on the new Upstox app:

• Click on the stock you want to place an order for from your watchlist.
• Click on 'Buy' or 'Sell' on the scrip details screen to view the order entry screen.
• On the order entry screen, enter the values in the mandatory fields, such as Quantity, Price, Trigger Price (for SL orders), etc.
• Tap on 'Review buy order' or 'Review sell order' to view the Order Summary. If you have disabled the order summary, you can just swipe to place your order.
• On the order summary screen, tap on 'Submit Order' to place your order.

Placing a Mutual Fund SIP order on the new Upstox app:

• Go to the Mutual Fund section of the app.
• Explore 'Investment ideas' and select a Mutual Fund for investment.
• Select the fund and tap on 'SIP'.
• Choose your SIP amount. You can either select an amount from the provided options or enter a custom amount.
• Choose a date for your SIP.
• Review your SIP order details and proceed to payment.
• Make an initial payment via Net Banking or UPI.
• Set up AutoSIP to ensure future SIPs go through automatically.
• You will be redirected to an authentication page to proceed with email verification.
• Enter the security code you receive and you will be directed to the 'Set up AutoSIP' Mandate page.
• Select your preferred verification mode, agree to the Terms & Conditions, and submit.
• Review the details of the mandate on the Mandate Approval Automation page.
• You will receive a confirmation message for your AutoSIP request.

Please note that the steps outlined above are specifically for placing orders on the Upstox app.

The benefits of investing in mutual funds through Upstox

Investing in mutual funds through Upstox has several benefits. Firstly, mutual funds are highly liquid, meaning you can easily sell them whenever you want without significant changes in their value. This flexibility is further enhanced by the ability to invest in a single fund or multiple funds, allowing you to diversify your portfolio and participate in different asset classes and industry sectors.

Another advantage is the ease of access to mutual funds on Upstox. You can purchase them through online brokerage firms, insurance companies, banks, or no-load mutual fund companies. Additionally, Upstox offers a user-friendly app where you can explore and select mutual funds for investment. The app provides "Investment ideas" such as "Invest Globally" and "All Weather Investing" to guide your decisions.

Professional management of your funds is another benefit of investing in mutual funds through Upstox. A dedicated team of experts handles all investment needs, saving you time and providing technical expertise to make informed decisions. This team carefully researches and analyzes various options before investing on your behalf, ensuring a cost-effective approach.

Lastly, Upstox offers zero brokerage and zero commission on mutual funds, making it a cost-effective platform for your investments.

Frequently asked questions