Two reasons why it is not a good option to buy an SIP from a 3-in-1 platform (such as the one mentioned in the question, or from any other Bank promoted or other online platform) for the following reasons:
- Upfront Service Charges: Many of them charge upto Rs 100 per mutual fund transaction (this is what i saw on ICICI Direct website today) and Rs 30 per SIP + 1.5% service charges. This is a huge upfront cost to you and reduces your returns straight away.
- Trail Commissions: These platforms do not offer “Direct Plans” which means you lose anywhere between 1% to 1.5% of your investment each year even if you dont do anything. Over time this reduces your returns by upto 40% or more.
What is the solution then?
Invest in an online direct mutual fund platform that combines best selection with zero transaction charges, and provides great advisory support.
