Direct Investment in Mutual Funds

[skarpio]

Help me understand how a layman should go about 'direct investing' in MFs:
[0] Choose one fund (say, magnum tax gain 93)
[1] Download the application form from the website (say sbimf)
[2] If investment >= 50K, throw in the KYC form
[3] Fill them up
[4] Transfer funds from one account to sbimf(?)
[5] wait for the receipts to come back

Is this all? Also, how do I go about redeeming the money 3 years down the line? Can this be done online?

Regards,
Suman

 

[mrindia]

Hello Suman!
Sorry to inform that step [4] & [5] went wrong.
[4] Attach a self attested copy of PAN card (it has to be submitted only once)
[5] Attach the crossed cheque
[6] Submit all the things at CAMS/KARVY office preferably before 3pm

Wait for Acc Statement.

For additional 'direct' purchases:
- Quote the Folio number at 'Transection slip' & submit it in same way alongwith cheque at CAMS/KARVY
- Or you may apply for PIN at AMC's office for online transections in existing folio. Then you can enjoy the comfort of on-line purchases at your PC.

Hope the point is clear.

Happy investing!
mr india

 

[skarpio]

Hello Suman!
Sorry to inform that step [4] & [5] went wrong.
[4] Attach a self attested copy of PAN card (it has to be submitted only once)
[5] Attach the crossed cheque
[6] Submit all the things at CAMS/KARVY office preferably before 3pm

Wait for Acc Statement.

For additional 'direct' purchases:
- Quote the Folio number at 'Transection slip' & submit it in same way alongwith cheque at CAMS/KARVY
- Or you may apply for PIN at AMC's office for online transections in existing folio. Then you can enjoy the comfort of on-line purchases at your PC.

Hope the point is clear.

Happy investing!
mr india

You need not be sorry! This is exactly the sort of advice I was looking for. I am worried that CAMS/Karvy guys wouldn't hoodwink me and put in the entry load for their benefit. But if I tick the 'Direct Investement' check-box in the application form this should not be a problem - right?
Few more questions:
[1] SBIMF website seems to allow online applications? Am I mistaken?
[2] Is PAN all I need -- no address proof required?
[3] Also, how long does it take to get the receipt back?

Thanks a lot for the quick reply! Keep 'em coming

 

[sam_kuw]

All mf still show it in thier offer document and other docs / website. I think they are allowed to show it but none of the mf's can charge for direct investments now which includes Reliance diversified power fund so you wont be charged......

in the same note there is now a possiblity that mf's may now introduce a exit load if you redeem within a certiain times, otherwise there may be direct investors who may use mfs for daily trading also .

Thank you for the reply, Vipin.

 

[mrindia]

Hello!
You are right, CAMS ppl can't do anything wrong to your application form if you have written 'DIRECT' in the box provided for broker's code.

[1] SBIMF website seems to allow online applications? Am I mistaken?

Of course they allow online purchases like most of their peers. Proper procedure is-- you make 1st purchase in any of their schemes 'Directly' (viz at CAMS). Folio No will be allotted to you. Obtain PIN for this folio for on-line transections by applying in required proforma. All additional purchases in existing/different schemes can be done in this folio on-line once you get the PIN. No entry load will be deducted this way. The same procedure is for almost all other fund houses.

[2] Is PAN all I need -- no address proof required?

Yes, No address proof required

[2][3] Also, how long does it take to get the receipt back?

CAMS ppl will give receipt immediately. Acc statement will reach your postal address within 7days or so.

mr india

 

[skarpio]

Thank you so much, mr india! I did the wrong thing today -- I went up to Karvy only to know that they would charge Entry Load for SBI Magnum Tax Gain 93 (which is what I am planning to opt for) as they are not the AMC. Some learning under the midday sun! But this stuff is fun -- doing your things the way you want them without letting 'Relationship Managers' spoil your money/mood. [Here's the story -- I actually had called one such over at my office and even after having instructed them to get me some ELSS 'advice' they kept on talking about ULIPs ]

 

[mrindia]

Thank you so much, mr india! I did the wrong thing today -- I went up to Karvy only to know that they would charge Entry Load for SBI Magnum Tax Gain 93 (which is what I am planning to opt for) as they are not the AMC. Some learning under the midday sun! But this stuff is fun -- doing your things the way you want them without letting 'Relationship Managers' spoil your money/mood. [Here's the story -- I actually had called one such over at my office and even after having instructed them to get me some ELSS 'advice' they kept on talking about ULIPs ]

Some Fund houses are with CAMS & others are with KARVY. Neither of them charge entry load on applications marked 'direct' in the box provided for broker's code.
mr india

 

[mrindia]

Hello!
1) Yes you will be eligible.
2) Not necessarily. you may get it from CAMS & fill it there also.

mr india

 

[swama694]

if i understood correctly for making an SIP following are the steps...seniors of this forum please correct if I am wrong in some point

1. Download and fill up appluication for respective schemes fill DIRECT for ARN
2. Fill in the sip details if SIP is separate form
3. Attach a copy of the PAN card
4. Attach the cheque for the first SIP crossed(a/c payee ony)
5. First SIP date should be 30 days before application date.
6. Copy of the cheque or a cancelled cheque
7.ECS/Auto debit form(cheque details should match with attached cheque)regards,

Swama

 

[NitinK]

Can we also get exemption on Entry load if we direct invest in NFO?