Zero Expense Mutual Fund Investment

Are you one of those mutual fund investors who loath to pay a single paisa to the MF agent/ advisor? Are you one of those savvy investors who do all there homework, select funds to invest in, but still have to pay the agent for only depositing the filled up form with the fund house? After SEBI abolished entry load for investment in mutual funds still we have to pay something to the intermediary. Since you do all the work of researching and selecting funds why should you pay a single paisa to anybody? Various banks and financial institutions will charge you 1 – 2 %, sometimes a little more for MF investments, presumably for advisory charges. Buying MFs using demat account is not cheap either as you pay while buying and also during selling. If you sell after significant appreciation of your fund the charge as percentage of the initial investment amount becomes even higher.

In the following few paragraphs I present you with a few options where you can transact without paying a single paisa to anybody.

1) If you are a HNI, look no further than ICICI direct. IDirect charges you nothing if your MF portfolio equals or exceeds 8 Lac with them.

2) Most (But not all) MF AMCs now have in place an online investment platform where you can transact with your e-banking account. Nowadays most banks provide you with internet banking facilities free of charge. Make full use of it. Initially you need to make one invest physically through an agent/ broker. Insist on filling the form yourself. Provide your mobile number and email address to avail many useful features such as SMS intimation of transaction etc. If your email is registered with the AMC you can also get statements of your account on demand. Now tick at the proper place to apply for a PIN number which will allow you to perform online transactions. This PIN number will be delivered to you later through courier. Once you get you get your PIN number, you can register with the AMC and make the all the transactions that you want. Just make sure to enter agent code as DIRECT while making purchases. One draw back of this approach is that you have to register individually with the AMCs that you wish to transact with.

3) In the last few months another avenue has opened up foe MF investors. And this is a freeway. Two online mutual fund distributors ( FundsIndia and Fundsupermart ) have made possible what was a desire of many for a long time: MF investment without cost. These two distributors allow you to invest with a variety of fund houses absolutely free of any charge. They earn from the distributor commission and trail commission. You need to make only an one time registration with them.

4) Bajaj Capital offers a service called Transaction Services where they will do the application handling for free.

One of these solutions may be the solution you were looking for. Also the common investment platform likely to be launched by the middle of 2010 may offer another similar option. Let us wait and see. In the meanwhile keep up your saving and investing habits.

Cheers :)