Every mutual fund is available in two plans – Regular and Direct. When you invest in a mutual fund scheme without the involvement of a broker/distributor/agent, you invest in the direct plan. On the other hand, when you invest in a mutual fund scheme through an agent, broker or distributor, you generally invest in the regular plan of a mutual fund scheme.
Ways of Investing in the Direct Plan of Mutual Funds
Read More About: Regular Vs Direct Plans of Mutual Funds
How To Invest in the Direct Plan of Mutual Funds?
You can invest in the direct plan of a mutual fund scheme via Paisabazaar following the below-mentioned steps:
Step 1: Visit Paisabazaar.com
Step 2: Click on the ‘INVESTMENT’ tab and select ‘MUTUAL FUND’ from the drop-down list.
Step 3: Enter your Name and Mobile Number in the form. Click ‘PROCEED’.
Step 4: You will be directed to the mutual funds dashboard where you can filter the schemes according to the category, investment duration, AMC (fund house) or performance rating. The dashboard also allows you to sort the schemes by 1 year, 3 year and 5 year returns.
Step 5: Click on the scheme in which you would like to invest and you will get all the details related to the fund such as its AUM (Assets Under Management), NAV (Net Asset Value), benchmark, risk level, etc.
Step 6: After selecting the scheme which best suits your investment horizon and risk appetite, enter the amount which you would like to invest in the scheme and click on ‘ADD TO CART’ to proceed. You can similarly add all the other schemes in which you want to invest to the cart.
Step 7: After adding the schemes of your choice to the card, click on ‘PROCEED’.
Step 8: Now enter your PAN details and Date of Birth and click on ‘SUBMIT’.
Step 9: Upload the required documents to complete the KYC (Know Your Customer) formalities and click ‘SUBMIT’. Now record a short video of yourself holding your PAN card to complete the KYC formalities.
Step 10: Fill in your personal details and click ‘SUBMIT’.
Step 11: Enter your bank details and that’s all. You have invested in the mutual fund scheme of your choice. You will receive the mutual fund units in your portfolio in a maximum of T+ 2 working days.
Is It Possible To Switch From Regular Plan To Direct Plan?
Yes, it is possible to switch from the regular plan of a mutual fund scheme to the direct plan. However, switching from regular to direct plan is generally considered as a redemption. Hence, it is important to take the implication of exit load and taxation into consideration before making the switch.
- Exit Load: Exit load is applicable to units of various schemes belonging to various mutual fund categories such as equity, debt, and hybrid for varying time periods. As a result, you need to consider the implication of exit load at the time of switching, as it decreases the value of the redemption, which in turn reduces the amount invested into the direct scheme.
- Taxation: Switching from the regular plan to the direct plan of a mutual fund scheme is considered as redemption. Thus, it attracts the application of capital gains tax. You can read about the tax treatment of mutual funds here.
Documents Required for Investing in Direct Plans
You need the self-attested copies of the following documents along with the KYC form for investing in the direct plan of mutual funds:
- An identity proof (Aadhaar card, Passport, Voter ID, or Driving Licence)
- PAN card
- An address proof
- A passport-sized photograph
Here is a list of 10 Direct Mutual Fund Schemes You can Invest in FY 2019-20
|Fund Name||NAV||AUM (Cr)||1 Year||3 Year||5 Year|
|DSP Equity Opportunities Fund – Growth||225.51||5720.56||-0.78%||8.24%||10.68%|
|SBI Bluechip Fund – Growth||31.51||5745.63||6.60%||13.81%||11.14%|
|ICICI Prudential Bluechip Fund – Growth||43.29||22182.14||-2.57%||9.20%||9.26%|
|ICICI Prudential Equity & Debt Fund Direct – Growth||139.88||26036.43||0.28%||8.87%||10.33%|
|L&T India Value Fund – Growth||35.48||8404.03||-7.69%||7.51%||10.96%|
|SBI Magnum MultiCap Fund – Growth||50.86||7582.94||1.57%||9.88%||12.24%|
|L&T Tax Advantage Fund – Growth||52.94||3420.69||-9.12%||7.26%||8.73%|
|Motilal Oswal Multicap 35 Fund – Growth||26.53||13634.94||-3.61%||9.11%||14.59%|
|Aditya Birla Sun Life Tax Relief 96 – Growth||31.42||8912.66||-8.90%||8.73%||11.38%|
|Mirae Asset Emerging Bluechip Fund – Growth||55.37||7616.5||3.52%||13.26%||16.45%|