ELSS is a diversified equity mutual fund in which most of the corpus is invested in equity and equity-related items. The ELSS investment comes with a three-year lock. ELSS funds provide an easy way to get tax benefits while benefiting from equity market prospects.
How to invest in mutual funds online?
You can invest in online mutual funds through websites, broker platforms, or through the free sites of AMC (Asset Management Company).
KYC compliance is mandatory for investment in Indian mutual funds. With the KYC registration agency, you have to fulfill the KYC verification requirement. KYC verification is a one-time activity post that you can invest in any Indian mutual fund.
There are two methods for the KYC compliance –
- Offline KYC method and
- E-KYC (online) process.
With some fund houses or transfer agents, it is possible to fulfill your KYC online in the following days.
- E-KYC based on PAN card
- E-KYC based on Aadhar Card
Investing in online mutual funds
Decide which fund you want: Once verified KYC, you can invest in online mutual funds. Now you have to find out which mutual fund is best for you. A variety of schemes are available for mutual funds on the market. Therefore mutual funds should be chosen based on your risk profile and personal objectives. You must also decide your investment medium: directly or through a consultant or distribution house.
Online investment: Once you have chosen the scheme of a mutual fund, in which you want to invest. Go to the Mutual Fund Company or AMC (Asset Management Company) website where you want to invest mutual funds. Complete an easy process to register and generate an investment folio. All subsequent folio transactions can be done online through your bank account. If you want to invest in some fund houses, then through their websites you will have to go through the whole process again. If you choose to invest through the autonomous portal, then you will need to open an account with them. When you have opened an account, you can use your bank account to buy ELSS mutual funds online from various fund houses. If you have a Demat account, you can also invest in mutual funds through a broker portal.
Systematic Investment Plan: You can also start with SIP. You should set the date and duration of the SIP. You have to give a standing instruction to the intermediary / Mutual Fund Company and the cash will be automatically debited from your bank account on the date of purchase and investment in SIP. It can be achieved by submitting a mandate for the mutual fund company/intermediary for their internet banking or by adding a mutual fund company/intermediary in the form of a bill.
Note: Thanks to the online transaction facility available with important AMCs and brokerage houses, ELSS online purchasing is now highly simplified. All you have to do is log into one of these AMC sites, go to their ELSS section, and buy ELSS funds online. Just make sure that you are compliant with KYC. If you are not, you must do so before purchasing from a mutual fund.