How to Apply for Mutual Funds in Bangalore

Know Basics:

  • The normal procedure is to fill-up the required application form and submit it along with a cheque for the amount of investment.
  • Cheques and Demand Drafts are accepted. Payment by cash is not allowed.
  • The agent/distributor would submit the application form with the cheque to the mutual fund company.
  • The mutual fund company would issue you an Account Statement with 4 working days from the date of investment.

Mutual funds invest in different asset classes including equity, debt and gold. Higher return seeking investors, who do not mind taking some risk, look at equity as an investment destination. Shorter-term investors, who may want to keep money liquid, need some sort of regular income or keep capital protected; look at mutual funds that invest in debt products.

Hybrid Funds:

1. Hybrid funds invest across equity and debt asset classes. They are either balanced funds (invest around 65% in equities and rest in debt) or monthly income plans/regular income plans (invests upto 25% in equities and the rest in debt).

Equity linked mutual funds

These funds invest in shares of companies that are listed on the stock exchanges. Depending upon the sub-category of equity class, we may define them as:

1. Large-cap funds: Large-cap funds are, typically, the least risky funds. These companies are among the least volatile companies as they are mostly in mature businesses. You must allocate highest to this category of investment.

2. Mid- and small-cap funds: These funds are riskier than large-cap funds. They invest in small-sized companies that are in their growing stages. Since these companies are in their growing stages, they can get volatile in an uncertain market. These are high-risk companies; they typically rise more than large-cap funds in rising markets, but fall more than large-cap companies in falling markets.

3. Sector/thematic funds: While sector funds invest in one or two sectors, thematic funds invest in a bunch of sectors that are woven by a common theme, such as infrastructure, consumer spending, fast-moving consumer goods and so on. These are the riskiest of all types of funds as their portfolios are typically very concentrated.

Debt funds

Debt funds invest in fixed-income yielding instruments. There are many types of debt funds, but broadly they fall into three broad types.

1. Bond funds invest in corporate bonds and partly in government securities. These funds are long-term and short-term in nature. Typically, long-term bond funds carry an average maturity of around three to about five or maybe even 10 years. The longer a debt fund’s average maturity, the riskier it gets because scrips with long maturities take a long time to get wound up and therefore get exposed to market vagaries and volatilities for a long time. Depending upon the interest rate environment you must allocate to these funds. If the interest rates are expected to fall, you may allocate more on funds with longer maturity.

2. G-Secs: The second type of debt funds is government securities (G-sec) funds. Like bond funds, these too come in long-term and short-term variety. These are mostly seasonal funds as they invest only in government securities; scrips issued by the Reserve Bank of India. Though government securities are the safest debt instruments because they are issued by the government of India and hence come guaranteed, they are also the most volatile because they are the most liquid debt instruments in the debt market. Allocate to these funds when you expect interest rates to fall.

3. Liquid and ultra short-term funds are meant to park your surplus cash instead of lying in a savings deposit. While liquid funds are meant to park your cash for up to a month, use ultra short-term funds if you wish to invest your cash for up to three-six months. These are considered to be the least risky because they invest in scrips that mature in a very short time.

4. Gold funds invest in gold bars or gold-backed securities. Gold funds are of two types
those that mimic gold prices in the form of an index fund and those that buy shares of gold mining companies. You must invest not more than 10% of your portfolio in a gold fund.

You can invest in Mutual Funds through various channels. Let’s have a look at these channels and some related important information.

Online Method

Step 1: Visit the website and register for online transaction services. Provide necessary information i.e. Folio Number, email id and mobile registered with the folio etc.
Step 2: The F-Pin will be generated and will be sent to you in email id and on mobile registered with that folio.
Step 3: Using this F-Pin you can create your User ID and Password.
Step 4: Login using the credentials just created and start investing.


Submit application

Step 1: Contact a distributor or agent of mutual funds.
Step 2: Get the application form.
Step 3: Fill an application form providing necessary information i.e. Name, Address, PAN, email id, mobile number etc. This email id & mobile number will be used for further communication and also can be used to register for online transaction services.
Step 4: Attach copies of relevant documents and submit it along with a cheque or demand draft for the amount of investment.
Step 5: If applied through an agent or distributor, they would submit the application form with the cheque and all relevant documents to the mutual fund company.
Step 6: The mutual fund company then would allocate you with a folio number for the particular investment and would issue you an Account Statement.

Through Mobile App (SBI)

With the advanced technology, new platforms like smart phones and tablets are being used to doing online transactions while on the move. m-Easy is one of such mobile investments facility which helps you Invest, Redeem and Switch from one scheme to another with the help of an SMS. With m-Easy you can manage your investments from any place, anytime

SIP Online

SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. SIP allows you to buy units on a given date each month, so that you can implement a saving plan for yourself. An SIP is generally preferred for an equity scheme and can be started with Rs 2500 per month. You can start your SIP online from convenience of your home with just few clicks. To know more about starting SIP online


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