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Investors new to the investing world often wonder if mutual funds are as good as they seem to be. Well, there’s no doubt it. Right from professional management to diversification of portfolio. From easy access to flexibility of choosing the mode of investments, it is indeed a boon to new investors. What’s more you can invest in mutual funds via the traditional offline method or online method. Let’s understand both these methods:

How to invest in mutual funds via the offline mode?

Under the offline mode of investment, an investor is required to submit a duly filled application formalong with a cheque or bank draft. You can send this application form at the branch office of the mutual fund house or the Registrar and Transfer Agents (RTA) or designated Investor Services Centers (ISC).

How to invest in mutual funds online?

Investing in mutual funds via the online way is a quite hassle-free process that allows an investor to invest in mutual funds from the comfort of their home. This method investing in mutual funds through the help of a financial intermediary i.e., a mutual fund distributor registered with the nodal association of mutual funds in India – AMFI (Association of Mutual Funds in India). Conversely, you might consider visiting the websites of the mutual funds and investing directly from there. To make things more simple for investors, several mutual funds and mutual fund broking firms or AMCs (asset management company) have launched their mobile apps. Investors can use these investor-friendly and convenient apps to invest in mutual funds in just a few clicks. Additionally, you can invest directly without the aid of any third-party. Of course, this way is only suggested if you are well-versed with the working of the markets. Investing directly means that you are taking the charge of your investments and arefine with being responsible for it.

You can invest in mutual funds either through a systematic way – SIP (Systematic Investment Plan) or lumpsum way. For investors who do not wish to time the markets, can consider investing through the SIP way. Remember, you do not really invest in SIP. It is merely an investment tool. SIP mutual funds ensure that regular payments are made towards desired mutual fund schemes for a determined period of time on a regular basis. You can also use an SIP calculator to evaluate the returns on your mutual fund investments and assess the future value of your investments. SIP investments inculcate a sense of disciplined investing among investors. They ensure that regular payments are made towards mutual funds irrespective of the market condition. So, an investor ends up buying more units when there is a market downturn and vice versa. This concept is known as rupee cost averaging. This essentially means that thanks to SIP, the average cost of the mutual fund units bought comes down. Happy investing!

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