A Beginner’s Guide to Investing in Equity Mutual Funds - Part 3

In Part 3 of this series we explore the various platforms through which investors can transact in Mutual Funds.

Whether you’re a beginner or a seasoned investor, there are several trusted online mutual fund platforms that make it simple to start investing, manage SIPs, and track your portfolio seamlessly.

1. Direct Mutual Fund Platforms (Zero Commission)

Direct mutual fund platforms allow investors to buy direct plans of mutual funds — which offer higher returns by eliminating distributor commissions. Examples include Groww, Kuvera, Zerodha, INDMoney, Upstox, and Fisdom. Within this category, a client can choose based on two other factors:

• Statement of Account (SOA) vs. Demat

• Other services

SOA vs. Demat: Like shares, Mutual Fund units can also be held in demat format. The Zerodha platform is totally based on demat for Mutual Funds. Groww also now provides an option for holding units in SOA or demat format. If your units are held in demat format, it means you can only use that particular platform to sell those units. Hence, if they were to start charging fees for using their platform, you cannot move out without selling those units. The advantages of demat form are that you only need to make one nomination, and getting a loan against MFs is very easy and less time-consuming. I would recommend investors stick with the SOA format.

Other Services: Most of these websites do not just provide MF services but others as well, such as:

• Investment in stocks

• Goal-based investing tools

• Portfolio analysis tools

• Expense tracking

• Investment in other financial products (i.e., insurance, NPS, FD, etc.)

• AI-based recommendations

• Tax optimization tools

Hence, investors can choose a site based on what features and assistance they require beyond mutual fund investing.

2. AMC (Asset Management Company) Websites

Every mutual fund house in India — like HDFC Mutual Fund, SBI Mutual Fund, ICICI Prudential, and Nippon India — allows you to invest directly through their official websites. This is how most early investors in direct schemes started investing. Investing through AMC websites is much more cumbersome than private platforms. Additionally, you need to create multiple login IDs and passwords for each website. Also, you do not get a unified view of your entire portfolio, since every AMC website will display only investments made in their specific schemes.

3. Bank & Broker Platforms

If you prefer an all-in-one financial solution, bank-linked and broker platforms are a choice. Examples include HDFC Bank, ICICI Bank, Axis Bank, Kotak Securities, and Paytm Money. However, here you would end up investing in regular schemes of mutual funds and, as a result, end up paying hefty commissions over the long run. Many investors erroneously think that when they are investing through their bank, there is no agent involved. The truth is the bank takes the place of the agent in this case.

4. Registrar Platforms (CAMS & KFintech)

CAMS and KFintech serve as official registrars for multiple AMCs in India and allow investors to view, switch, or redeem units across different fund houses. They have jointly established MFCentral, which allows investors to perform all mutual fund transactions across AMCs through a single platform. The platform was created in 2021 following a directive from the market regulator, SEBI, to provide a unified portal for mutual fund investors. This is what I recommend most investors choose, since it provides a single portal for investments in all AMCs, is free (and likely to remain that way), and does not push any other products or services.

Conclusion

The choices available for investing in Mutual Funds are many. An investor has to consider cost, the mode of holding MF units, and the other features required from the platform they choose.