How To Invest In Direct Mutual Funds?

How To Invest In Direct Mutual Funds?

Direct plans have been growing in popularity in recent years. They cut out the middleman and offer a more cost-effective way to invest in mutual funds. In other words, you get more bang for your buck.

As more and more people discover the benefits of direct plans, their popularity has been on the rise. In this article, we’ll take a closer look at direct mutual funds, and how to get started with investing in them.

Direct vs Regular Plan

Knowing the difference between the two plans is important for making informed choices. Think of it as a championship match, and you want to pick the right team to bring home the win. So, let’s dive in and find out which plan will be the MVP of your investment strategy.

Net Asset Value (NAV)

When investing in a mutual fund, you’ll want to pay close attention to the Net Asset Value (NAV). Direct plans have a lower Total Expense Ratio (TER) compared to regular plans. That means that your investment will grow at a faster pace. Simply put, a lower TER equals a higher NAV, and that means more money in your pocket.


The difference in TER also affects the returns you can expect from your investment. The commissions for equity funds are usually higher than those for debt funds.

So the difference in TER can range from 0.5% to 1%. With a longer investment horizon, direct plans offer larger returns compared to regular plans.

Financial Advisor

Do-it-yourself (DIY) investors will love the freedom that direct plans offer. Investing in a direct plan doesn’t need the help of a financial advisor. You can make your investment through an AMC website, the registrar’s office, or a SEBI Registered Investment Advisor (RIA).

Invest in Direct Mutual Funds Online

Say goodbye to the hassle of visiting many offices, and hello to a smarter way of investing. With a few clicks, you can now make investments in Direct Mutual Funds online.

Step1: Choose your mutual fund platform

Many online platforms offer direct mutual funds. Choose one that is trustworthy, has a user-friendly interface, and offers a wide range of funds to choose from.

Step 2: Complete your KYC

Know Your Customer (KYC) is a mandatory process that all investors must complete to start investing in direct mutual funds. This process verifies your identity and most platforms allow you to complete the KYC process online.

Step 3: Open an account

Once your KYC is complete, you can open an account on the platform you have chosen. You’ll need to provide personal details such as your name, address, PAN, and bank account information.

Step 4: Choose your fund

You can browse through various mutual funds offered by different AMCs. After that, select one that matches your financial goals. With a wide variety of funds to choose from, it’s important to understand your investment goals and risk tolerance before making a choice. Do your research, compare funds, and make an informed decision.

Step 5: Invest

Once you have chosen your fund, you can start investing. Most platforms offer many options for transactions, including one-time investments, SIPs (Systematic Investment Plans), and STPs (Systematic Transfer Plans). Choose the one that best fits your investment goals and needs.

Benefits of Investing Online in Direct Mutual Funds

The advantages of investing in direct mutual funds online are as follows:

  • The process is less time-consuming
  • You get to choose from numerous mutual fund schemes, which is not the case when you choose the plan offline
  • After the KYC details are successfully updated, you can invest in various direct mutual fund schemes on multiple platforms

Invest in Direct Mutual Funds Offline

If you prefer the good old-fashioned way of doing things, then the offline method of investing might be what you’re looking for.

Step 1: Locate the nearest AMC office

Start by finding the nearest office of the Asset Management Company whose fund you have selected.

Step 2: Complete the KYC process

Get your KYC (Know Your Customer) process completed. If you’re not already KYC compliant, you’ll need to complete this process at the AMC branch.

Step 3: Collect the required documents

Gather the necessary documents. You’ll need a self-attested copy of your PAN and a self-attested copy of your address proof. You can use any one of the following documents as proof of address:

  • Passport copy
  • Latest telephone bill (landline or mobile)
  • Latest electricity bill
  • Latest bank passbook
  • Bank account statement
  • Latest Demat account statement
  • Driving license
  • Rent agreement
  • Ration card

Step 4: Fill out forms

Fill out the Common Application Form or SIP Form, and if you choose the SIP route, choose the NACH Mandate (National Automated Clearing House) as well. The NACH Mandate will give the AMC permission to auto-deduct the SIP amount from your linked bank account from the starting date of your SIP.

Step 5: Submit forms and investment amount

Submit the completed forms and necessary documents, along with a cheque or demand draft in the name of the AMC for the desired investment amount.

Step 6: Receive the folio number and account statement

After the transaction starts, you will receive a folio number for your investments. You will also receive an account statement.

What Next

Congratulations! You’ve made your first step towards securing your financial future by investing in a mutual fund. But the journey doesn’t stop here. Here are some essential steps you need to take to secure your investments:

Stay in the Loop

Keep an eye on your mutual fund investments by regularly checking your account statement or online account. This way, you’ll stay informed about how your funds are performing and make any necessary changes as needed.

Regular Portfolio Reviews

Just like a doctor checks your health regularly, it’s important to review your portfolio regularly. This will help you check if you need to rebalance your investments or make changes to your investment strategy. It ensures that your investment plan matches your long-term money goals.

Invest Consistently with SIPs

If you’re new to investing, consider starting with Systematic Investment Plans (SIPs). SIPs allow you to make consistent investments over time and enjoy the power of rupee cost averaging. It’s a great way to start building your wealth for the future.

Keep Your Eyes on the Prize

It’s essential to remember why you invested in the first place. Your long-term financial goals should always be at the forefront of your mind when making investment decisions. Stay focused on your goals, and your investments will grow towards them.


At Koshex, we believe in empowering our customers with the right tools and knowledge to make informed financial decisions. We give you the tools and information you need so you can manage your finances on your own. Our platform is a one-stop shop that helps you understand your options and achieve your financial goals.

So, why delay your investment journey when you can start with Koshex today? Sign up with Koshex now and take the first step toward a financially secure future!