Let me flip this question around and tell you where NOT to buy direct mutual funds.
- Of course we are assuming that you are not buying mutual funds from brokers as that means you lose 1% or more each year. Compounded commissions erode your wealth over time. Some brokers cleverly use the word ‘Direct’ in their names or websites, but they take hefty hidden commissions! Some have huge ad spends (IPL matches, etc); it is your money funding their spends!
- AMC Websites – Too Many, Too Much Information:
Great if you are a savvy mutual fund investor and have done all the research. Not so if you are busy trying to make a living. There are 40+ AMCs (Mutual Fund companies), hundreds of Funds, thousands of schemes. How will you research the good ones out?
Even if you did, will you have the time and patience to create login ids and passwords with each one of the AMCs? And remember them? Tracking your holdings becomes a nightmare! - ‘Neutral’ platforms like MyCAMS, Karvy or MFU Online – No Advice Here:
These are kinda good and take away the pain of managing multiple login accounts. But the likes of MyCAMS and Karvy are restricted to only the Mutual Funds they service. This means that you cannot invest in good funds from Quantum, Axis, etc in MyCAMS. Similarly with Karvy, you cannot invest in good funds from Birla Sun Life, DSP BR, etc.
Besides these platforms are neither equipped to, nor consider offering real advice – which funds to get into, which funds to get out of, what should I today. There is nothing personalised here. It is all plain transaction. And that could be a pain! - Some Online Direct MF platforms – Beware of (High) Pricing Models:
There are many that have come up these days, and you can decide which one to invest with after careful evaluation. Most have pricing models that are convoluted and high. That beats the very purpose of direct funds. Some charge per investment transaction, some charge per withdrawal. Some charge per SIP, per financial goal, per call etc. Perhaps they themselves are under pressure from their investors to make money.
It is often better to go with a platform that has a clear and simple pricing. Preferably a flat subscription. Then there is no need to track how many transactions you have done, or look for other potential hidden costs. After all with Direct, you are signing up for Zero hidden costs, full transparency and simplicity.
To sum up, the best place to buy direct mutual funds online is a Trusted Online platform that is fully paperless, provides super convenience (mobile app, web app, call center, email service), has e-KYC for new investors, selects good funds to invest in, tracks their performance, can provide timely advice if needed, and one who is in for the long haul. One place where you can manage all your fund holdings.
If you are upto it, give JAMA a spin https://jama.co.in/
First 50K investment is free, Subscription starts at just Rs 499/year flat.
