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Earlier, investors were liable to pay an entry load for making investment in mutual funds whether it was through brokers, distributers or agent. But now, after 4th August, 2008 according to SEBI, the investors are no more subjected to pay the entry load and can invest in mutual funds directly.
Steps of investing: First of all, make a clear and proper analysis of all the schemes available and shortlist the one you find interesting and would like to invest in. The next you need to do is to fill up the application form which you can get either by downloading it from the official website of the fund house or from the registrar of the fund house.
The filled up form can then be submitted at any of the offices of the fund house or of the registrar. Before submitting the form, make sure of enclosing it with the know-your-client acknowledgement, cheque and copy of the PAN cards of all the applicants applying for it jointly. But there is a plus point of getting to apply across many of the mutual funds being handled by the registrar if you submit the form at its office.
Cost of investing directly: Investing directly is free of cost. But in such case, there is no agent to handle your account. It’s you who will have to keep the track of the proceeds and maintain the records. And if there arises any problem regarding payments, dividends or anything else, you’ll have to sort it yourself by getting in contact with the fund house directly.
Is it preferable to invest directly: Whether investing directly will be beneficial for you depends entirely on you. If you have the time, knowledge and confidence that you can handle the records and select the best scheme available, you can definitely invest directly. But, if you are quite busy to handle the records and transactions, you should prefer investing through some broker.
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