How to buy mutual funds online first time
Once upon a time, back in the analog age, investors could only buy and sell mutual funds through financial professionals: brokers, money managers, and financial planners. But online investment platforms have made traders of us all, and today, anyone with a computer, a tablet, or even a smartphone can buy mutual funds. All you have to do is know where to buy them, what kind of fund you want, and what sort of fees, sales charges, and expenses you might encounter. Of course, if you have a retirement-oriented account, such as a k plan or a self-directed IRA , the account custodian or plan administrator likely allows for direct mutual fund trading through its website though with k s, you are restricted to those specifically offered by the plan and usually to a prescribed number trades you can make per year or quarter. For the purposes of this article, we'll assume you're looking to buy on your own, either for a regular taxable account or a tax-deferred one.
MFOnline: Investing Made Easy
So, you are a first time mutual fund investor and are yet to get to grips with what mutual fund investing is all about. Here is a primer on how to go about leveraging the power of mutual funds. Here are 13 questions that will answer all that you wanted to know about investing in mutual funds for beginners:. There is a difference. The mutual fund first raises money from small investors who subscribe to the MF scheme.
With that money, the mutual fund buys shares and other securities. That depends on the fund that you invest in. For example, equity funds will invest your money in shares. Debt funds will invest your money in government bonds and corporate bonds. Liquid funds will invest your money in short term government bills. Hybrid funds will invest in a mix of equity and bonds. MF investments depend on the nature of the fund. Hence, financial planners ask the first time mutual fund investors what their life goals are and then recommend them the correct mutual fund that suits their needs.
The mutual fund investor holds MF units. Each unit will have net asset value NAV that is announced daily by the mutual fund. Your investment value is the NAV of the fund for the day multiplied by the number of units that you hold. That is absolutely correct. But the mutual fund does not only benefit from market prices going up. The mutual fund will receive dividends on its shares and that is credited to the mutual fund.
The fund will also make profits by selling some shares. That will also be credited to the mutual fund. Your NAV is the sum of dividends received, profits earned and the rise in prices of holdings. Investing is a specialized job and mutual funds have fund managers, analysts and traders with years of experience.
First time mutual fund investors do not have the time or specialization to get so deep into the markets and stocks.
These professional fund managers can do it better. There is another advantage. You can only buy a few stocks but mutual funds can buy large number of stocks and give you proportionate units. So, you also get the benefit of diversification. One common question among beginner mutual fund investors is that how much fees will they be charged?
The answer is that Angel BEE does not charge you any fee for investing in mutual funds. But every mutual fund has expenses in the form of transaction costs, fund management costs, statutory costs and administrative costs. These costs will eventually get debited to your fund and will reduce the NAV. This is called the expense ratio and it varies between 1. Also if you exit the equity fund before a period of 6 months or 1 year, then most funds will charge you an exit load.
These are called sector funds and are very risky. Ideally, you must prefer diversified equity mutual funds where there is no concentration risk. Just as equities are risky, equity funds are also risky. But you can reduce your risk by opting for diversified equity funds.
Beginners to mutual fund investing should consult a professional financial advisor to decide the type of mutual fund you should invest in. Predicting equity fund returns over 1 year is not only difficult but also pointless. However, there is no guarantee of returns in an equity fund. That is correct. In mutual fund investing, you need to take risk to get higher returns. If you take lower risk you get lower returns.
For example, as you move from equity funds to hybrid funds to debt funds to liquid funds; the risk and the potential returns keep reducing. You can read more about the differences between equity and debt funds and get to know the advantages and disadvantages they offer. It is hard to predict the right time to buy and sell in equity markets.
The best option for investing in mutual funds for beginners is to do a systematic investment plan SIP on equity funds. This will ensure that over a period of time your cost of acquiring will be low and so you will create wealth over time. Mutual funds work on the principle of the power of compounding. The answers will amaze you:.
If these sound unreal, they are actually very real. This is what the power of compounding can do. The earlier you start, the longer you invest and the more wealth you create. Hence first time mutual fund investors are advised to start investing as soon as possible. You must start with your goals and then work backwards. For longer term goals use equity funds, for intermediate goals use hybrid funds or debt funds and for short term goals use liquid funds.
The best way to create this plan and define your goals is to just download the Angel BEE App which can help you through the process at the click of a button on your smart phone. At the front, the ARQ appears to be a very simple engine for the customer but behind the screen there are billions of data bytes that are being churned to arrive at the solution.
The ARQ will combine big data with analytics and help you create the right mutual fund portfolio to meet your objectives. Everything is online and you can ever transact and monitor your mutual fund portfolio online.
With over Get The App.
Choose the desired scheme and investment details. Verify and complete transaction.
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account. Circular No.
Updated on Mar 09, - PM.
So, you are a first time mutual fund investor and are yet to get to grips with what mutual fund investing is all about. Here is a primer on how to go about leveraging the power of mutual funds.
BEGINNER’S GUIDE FOR FIRST TIME MUTUAL FUND INVESTORS
Mutual funds are the most lucrative forms of investment for defensive investors. They come for every type of financial goal and at the same time are convenient to invest in. Mutual Funds offer returns in line with what a goal might need and better flexibility than any simple fixed deposit or savings scheme. Buying a mutual fund online is the easiest way to get started with an MF. Instead of going for a lump sum, you could also go for a monthly instalment based investment called SIP Systematic Investment Plan. But today, we are going to walk you through how to buy mutual funds online.
Step-by-step guide to help you start investing in mutual funds online
Mutual Fund direct plans are the first choice of do-it-yourself investors. The reason is simple, direct mutual fund investment eliminates the need of a distributor. Hence, it not only saves on transaction costs if any, mutual fund direct plans come with lower fees. While the difference in costs may seem negligible at first, but over time—thanks to the magic of compounding—the difference in value terms works out to lakhs of rupees. To know more about mutual fund direct plans and the benefits of direct mutual funds, do read though this guide first: Mutual Fund Direct Plans - Everything You Need To Know. In this article we delve deeper on how to buy direct mutual funds or rather how to invest in direct plans of mutual funds. Many of you may be wondering from where to buy direct mutual funds, as the option of direct plans is not available with your local mutual fund distributor or stock broker. Hence, you need to invest in direct mutual funds online through an investment advisor or the mutual fund's website or MF Utilities. Or else, you will need to visit the office of the fund's registrar. So along with your pursuit to select the best direct mutual funds, it will be of some benefit to check out the different options for direct plan investments.
Which is the best mutual fund for newcomers? Franklin Templeton Mutual Fund apologises unconditionally to Sebi.
To invest in mutual funds you need to know how to invest in mutual funds. In this article, we have explained different ways on how to start investing in mutual funds in India online.
Start Investing In Mutual Funds
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How To Buy Mutual Funds Online in India 2020: A Simple Guide
Have you heard the term MFOnline? Well, for those who already know it and for those who don't, this article will simplify and elaborate the concept of MFOnline. The advancements in the field of technology has been so considerable that a person can invest and trade in mutual funds sitting at any place and at any time. So, let us understand the various aspects of MFOnline like the concept of mutual funds, fund houses having online investment facility, for instance, UTI Mutual Funds, the process of investing online in mutual funds for first timers, methods of online mutual fund investment, and online SIP. Ready to Invest?
