A Guide To Investing In Mutual Funds Via Zerodha

Investing in mutual funds has become increasingly popular in recent years, thanks to the convenience and accessibility they offer. Zerodha is a popular platform for investing in mutual funds, known for its low fees and user-friendly interface. Here's a step-by-step guide on how to invest in mutual funds using Zerodha:

Step 1: Open a Zerodha Account

Sign up on the Zerodha website by providing basic information such as your name, email, and phone number. You will receive an email with instructions to complete the account opening process.

Step 2: Complete the KYC Process

Know Your Customer (KYC) verification is mandatory for all investors in India. Provide documents such as your PAN card, Aadhaar card, and address proof. You can complete the KYC process online through your Zerodha account.

Step 3: Add Funds to Your Account

Log into your Zerodha account and add funds using net banking, UPI, or a debit card. This step ensures you have the necessary funds to invest in mutual funds.

Step 4: Choose the Mutual Fund

Decide whether you want to invest in a lump sum or through a Systematic Investment Plan (SIP), which allows you to invest at regular intervals. Log into your Zerodha account, click on the 'Mutual Funds' tab, and browse the available options.

Step 5: Place Your Order

After selecting the mutual fund, click on the 'Buy' button. Enter the investment amount and payment method. Confirm your order, and the mutual fund units will be credited to your demat account.

With these simple steps, you can start investing in mutual funds through Zerodha, growing your wealth over time. Remember to research and choose mutual funds that align with your financial goals and risk tolerance.

Opening a Zerodha account

To open a Zerodha account, you can follow these steps:

• Visit the Zerodha website and click on the 'Open an account' button.
• Fill in your basic details such as your name, email address, and phone number.
• Check your email for a link to complete the account opening process. Follow the steps in the email to finalise your account.
• Complete the KYC (Know Your Customer) process. This is mandatory for all investors in India. You will need to provide your PAN card, Aadhaar card, and address proof. You can do this online by logging into your Zerodha account and following the instructions.
• Add funds to your account using net banking, UPI, or a debit card. This will be necessary to buy mutual funds.

Once you have opened and set up your account, you can start investing in mutual funds.

Completing the KYC process

Completing the KYC (Know Your Customer) process is a mandatory requirement for all investors in India. To complete the KYC process, you will need to provide some basic details such as your PAN card, Aadhaar card, and address proof. You can complete the KYC process online by logging into your Zerodha account and following the instructions.

• Log in to your Zerodha account.
• Navigate to the "Profile" or "Account" section.
• Look for the "KYC" or "KYC Status" option and click on it.
• Upload or provide the required documents, including your PAN card, Aadhaar card, and address proof.
• Follow the instructions provided by Zerodha to complete the process.

It is important to ensure that your documents are valid and up-to-date. The KYC process helps verify your identity and ensures compliance with regulatory requirements. If you encounter any issues during the KYC process, you can contact Zerodha's customer support for assistance.

Adding funds to your account

To add funds to your Zerodha account, follow these steps:

• Log in to your Zerodha account.
• Click on the 'Add Funds' button.
• Choose your preferred payment method from the available options, which include net banking, UPI, and debit card.
• Proceed to add funds to your account using your chosen payment method.

Once you have added funds to your account, you are ready to purchase mutual funds. You can either invest in a lump sum or opt for a systematic investment plan (SIP), which allows you to invest a fixed amount at regular intervals (monthly, quarterly, etc.).

Choosing a mutual fund

• Investment Goals: Start by defining your financial goals and investment horizon. Are you saving for retirement, a child's education, or a shorter-term goal? Different mutual funds are designed for different time horizons, so matching your goals to the fund's investment strategy is essential.
• Risk Appetite: Determine your risk tolerance and choose funds that align with your comfort level. Generally, equity funds are considered riskier but offer higher returns over the long term, while debt funds are less volatile but provide more modest returns.
• Performance and Track Record: Analyse the historical performance of the mutual fund. Look at its returns over various periods (e.g., 1-year, 3-year, 5-year returns) and compare them against the relevant benchmark indices. Remember that past performance doesn't guarantee future results, but it gives you an idea of the fund's management capabilities.
• Fund Manager and Fund House: Evaluate the fund manager's expertise and track record. Assess their experience, investment style, and how they have navigated different market conditions. Additionally, consider the reputation and stability of the fund house or Asset Management Company (AMC).
• Expenses and Charges: Be mindful of the expenses associated with the mutual fund, such as fund management fees, entry and exit loads, and other charges. These expenses can eat into your returns over time. Zerodha offers direct mutual funds, which have lower expense ratios since they don't involve distributor commissions.
• Tax Implications: Consider the tax implications of your investments. For example, Equity-Linked Savings Schemes (ELSS) offer tax benefits under Section 80C of the Income Tax Act, 1961. Understand how your investments will be taxed to make informed decisions.
• Diversification: Diversification is a key aspect of investing. Opt for mutual funds that offer a well-diversified portfolio across sectors and asset classes. This helps to mitigate risk and provide a more balanced investment approach.
• Ratings and Reviews: While ratings and reviews shouldn't be the sole basis for your decision, they can provide additional insights. Look for ratings from reputable agencies and consider the feedback of existing investors to gauge the fund's performance and customer satisfaction.
• Your Own Research: Conduct your own research and due diligence. Read the scheme's offer document, understand its investment objectives, and assess if it aligns with your goals. Utilise resources like Zerodha Coin, which offers analytical tools and fund comparisons to aid in your decision-making process.

Remember, investing in mutual funds involves a careful assessment of your financial situation, goals, and risk tolerance. Take the time to understand the mutual fund's characteristics, including its investment strategy, portfolio composition, and historical performance, before making a decision.

Placing your order

To place an order, log in to your Zerodha account and click on the ‘Mutual Funds’ tab. You will see a list of mutual funds to choose from. You can either invest in a lump sum or a systematic investment plan (SIP). SIP allows you to invest a fixed amount at regular intervals (monthly, quarterly, etc.).

Once you have chosen the mutual fund you want to invest in, click on the ‘Buy’ button. You will be prompted to enter the amount you want to invest and choose the payment method. Make sure you have added funds to your account before placing an order.

After confirming your order, your mutual fund units will be credited to your demat account. Typically, orders placed before 1:30 pm are placed on the MF execution platform on the same day and executed at the end-of-day NAV price. Orders placed after 1:30 pm are placed on the next trading day and executed at the next day's NAV price.

You can also set up a Systematic Investment Plan (SIP) to buy direct mutual funds online. This allows you to invest in mutual funds at regular intervals without being affected by market valuations.

To start a SIP on Zerodha Coin:

• Log in to the Zerodha Coin website or mobile app.
• On the Coin Dashboard, use the search bar to enter the name of the AMC or Mutual Fund.
• Click on the 'Direct SIP' option.
• Choose the initial investment amount.
• Select the frequency of the SIP (weekly, monthly, etc.).
• Choose the instalment amount to be deducted at each interval.
• If desired, specify the number of instalments or the total instalment amount to be deducted.
• Click on 'Start SIP' and confirm the order.
• To automate payments for SIP instalments, register for the eMandate feature and add your debit card or net banking details.

Frequently asked questions