As per guidelines of Securities & Exchange Board of India (SEBI) via this circular, no entry load (usually 2.25%) shall be charged for direct applications received by the Asset Management Company (AMC) i.e. applications received through internet, submitted to AMC or collection centre/ Investor Service Centre that are not routed through any distributor/agent/broker.
If you are making investment in MF (lump-sum or SIP) and you route your application through a broker.You will be charged entry load.
To avoid paying the entry load you now have to invest directly with the Mutual Fund i.e. you have to submit the form directly to the Mutual Fund without the assistance of any agent/distributor. Mutual Funds bought through sites like ICICI direct, India info line, Kotak securities would also be considered as investment through brokers. You will be charged entry load on these investments.
It shall also be applicable to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.
What is entry load? Suppose you decide to invest in MF. Say the price (in Mutual fund jargon it is called Net Asset Value or NAV) of one mutual fund unit is Rs 10. And the entry load is 1% then you would have to pay Rs 10.10 for one unit of Mutual Fund. See this to understand how much each MF equity scheme charges as front load. Most charge 2.25% so you end up paying Rs 10.225/- per unit.This load charges is used for meeting marketing, selling and distribution expenses. Or in a nut-shell this money goes to your broker. Now as we know, brokers are making more money than the mutual funds themselves. So it means most MFs are using brokers as the way to sell their schemes.
If you can choose your fund. All you need to do is fill the form and send it to concerned AMC/ Investor service center to save on the entry load.
Now question comes how to apply directly to the AMC.
Download the mutual fund form from the AMC website. Take a print out, fill the form and submit to your nearest CAMS or Karvy Investor centre along with copy of PAN card, SIP form(if required) and cheque. Please find the download links for all the AMCs below.
ABN AMRO Mutual Fund
AIG Global Investment Group Mutual Fund
Baroda Pioneer Mutual Fund
Benchmark Mutual Fund
Bharti AXA Mutual Fund
Birla Sun Life Mutual Fund
Canara Robeco Mutual Fund
DBS Chola Mutual Fund
DWS Mutual Fund
DSP Merrill Lynch Mutual Fund
Edelweiss Mutual Fund
Escorts Mutual Fund
Fidelity Mutual Fund
Franklin Templeton Mutual Fund
HDFC Mutual Fund
HSBC Mutual Fund
ICICI Prudential Mutual Fund
IDFC Mutual Fund
ING Mutual Fund
JM Financial Mutual Fund
JPMorgan Mutual Fund
Kotak Mahindra Mutual Fund
LIC Mutual Fund
Lotus India Mutual Fund
Mirae Asset Mutual Fund
Morgan Stanley Mutual Fund
PRINCIPAL Mutual Fund
Quantum Mutual Fund
Reliance Mutual Fund
Sahara Mutual Fund
SBI Mutual Fund
Sundaram BNP Paribas Mutual Fund
Tata Mutual Fund
Taurus Mutual Fund
UTI Mutual Fund
Investing online with zero entry load:
For investing online on mutual fund’s websites, you need to have HPIN for that particular AMC. If you are already invested in any of the scheme of an AMC, you may fill PIN form and submit to nearest investor centre to get the PIN generated. Also If want PIN generated for your new investment don’t forget to check the online transaction option in mutual fund application form. After PIN generation, you can transanct online on AMC websites.
You may find PIN form for various AMCs in the downloads section of the website. Some of the AMC like ICICI, Birla also provide instant generation of PIN without any paperwork. Also please find below websites of AMC where you can login and buy, transfer and redeem mutual funds online.
Kotak Mutual Fund
Birla Sun Life Mutual Fund
Principal Mutual Fund
Reliance Mutual Fund
SBI Mutual Fund
HDFC Mutual Fund
ICICI Pru Mutual Fund
Franklin Templeton Mutual Fund
Fidelity Mutual Fund
UTI Mutual Fund
CAMS Online Transaction Service
Karvy Online Services
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Good and informative article. Got this details from Deepak Shenoy’s Blog.
Hope current ban on Entry load will change most of the AMC and we will see their online transcation facilities available in coming days. If you had a pin, you can redeem or switch online in CAMS ( not tried in Karvy as it was favourites with AMC back in 2003-2004).
For SBI, you don’t have kind of online interface similar to others. You can buy and use same folio number and money is deducted from Online Banking facility. You can see units on CAMS site if you got PIN.
Franklin Templeton got their own Registar Services (like UTI) so that is again pain. But their online interface is good and they provided this facility since long time.
I prefer CAMS for their reach (Office in Tier II and Tier III), technology use and number of AMC’s which are available with them are highest.
Pankaj,
This site is really informative for first timers like me.
Can you suggest me for the query below?
I want to invest around Rs 10,000 a month in Mutual funds. How many schemes I should go for. I am going to be first time investor.
Reading your article it seems that I need to download the MF form, fill the form and go to
the Karvy centre and submit it. This shall avoid entry load.
Does the Karvy centre charge for this?
Also can you give me a list of good MF that I should invest?
I would start a SIP in these MF.
Which option is better. Growth / Dividend?
Also suggest how to claim the money back when needed? Is it by approaching the Karvy centre?
@Maulik,
Entry load on all mutual funds has been scraped and now it does not matter from where you apply, you will not be charged any entry load by AMC.
However as entry load was used by AMCs to pay commission to agents.
Now agents/brokers may charge service fees as they will be no more getting commission from AMC. So If your broker does not charge any service fees, you can apply through him also.
In case you want to do it direct through CAMS or Karvy, you may download form and submit same after filling in any of their transaction centers. They do not charge anything for this. Also make sure you also fill HPIN (for online login) form along with application so that you don’t have to go to karvy of cams office, next time you want to do a transaction; you can do that online.
If you want to redeem mutual funds, then you have to give a written redemption request in CAMS/Karvy office But if you have online login, you can also do it from your home @ Internet.
Now comes investment, If you want to invest 10k per month. Split this into diversified equity, Gold and debt funds.
Growth option is better if you want to be invested for a longer period, dividend when you need you money back at regular intervals.
Dear Pankaj Batra
Is/Are there any site(s), where one can buy these MF units WITHOUT any charge whatsoever ?? (no brokerage, no entry-loads, no demat transaction charges for MF units, etc.)
I heard of one such site, but am not sure whether they can be trusted : http://www.fundsindia.com
Also, which online trading portals do not charge anything for investing in MFs thru their online trading portal ?? I heard that Kotak securities and Share Khan do not charge anything, but is ut true ?
Kinldy guide as I wish to invest about rs. 4- lacs in MF units without entry load or brokerage and I wish to invest long-term
Thanks & Awaiting your reply
@Agarwal,
You can buy mutual fund without any brokerage, entry load or service charge; directly on the mutual fund website. For that first you will have to get HPIN for the same for login into the online account. All mutual fund houses generate and send PIN by post after getting a written request along with folio details.
What you can do is for the first time, you can submit the mutual fund form by hand in CAMS/Karvy offices and along with that submit a form for PIN generation.
Other sites like fundsindia or others may not be charging as of now but may charge in future as current model does not give them anything and is not sustainable for long.
Kotak Securities, charges service charge for transactions. No idea about sharekhan.
Thank you VERY MUCH for your reply
But my problem is that I wish to invest in at least 6-7 different Mutual Funds
That means I will have to do paperwork for 6-7 times, where there is always a time-lag
And whenever I drop an MF, and add a new MF, again I have to do that work, again with a time-lag
So therefore, I was looking for a place / site / method where I can invest for multiple MFs, with the ease of switching / adding new / deleting old MFs
Any suggestions ? Do Karvy or CAMS themselves any such online facility (since they are collecting forms anyways) ?
Lastly, would you be able to recommend 7-8 MFs which are equity based, and agggressive for long-term investments ?
ajagarwal@mtnl.net.in
@Mr Agarwal,
You will have to do it only one time with each mutual fund house. A single PIN is provided for a folio and you can keep multiple funds by a AMC under same folio.
Karvy and CAMS do not provide such facility but NSDL is coming up with such infrastructure (Read here for more).
Some good funds are : Birla Sunlife mid cap fund, HDFC Equity fund, HDFC Top 200, Reliance growth, HDFC tax saver, Sundaram Tax saver, SBI magnum taxgain and
Franklin India Taxshield
Hi Pankaj
I am investing in following MFs through monthly SIP.
Ques1 – Are these funds good for investment as of today?
Ques2 – Could you please let me know which fund, out of these should i continue investing and which i should redeem the units completely.
Ques3 – I want to start investing some additional amount through SIP. Should i invest in some of these below or you would like to suggest some new funds.
Ques4 – Is it possible to increase the amount of existing SIP or I need to apply for a new SIP?
Birla Sun Life Frontline Equity Fund Plan A – Gr (from Oct 2008)
HDFC Equity Fund – Div (From Jan 2008)
Reliance Growth Fund Gr (From Oct 2008)
SBI Magnum Sector Fund Umbrella – Contra – Div (From Jan 2008)
Sundaram BNP Paribas Select Focus – Gr – (From Oct 2008)
HDFC TOP 200 Fund Gr ( From June 2010)
Regards
Manish
@Manish
1. All these funds are some of the better equity funds in market.
2. There is no need to redeem these funds. You may remain invested in them, If you are not in a financial need.
3. You may start new investment in HDFC Top 200 Fund, Birla Sunlife Frontline equity fund and HDFC Equity Fund. You may also choose from DSP Backrock Top 100 fund, Sundaram S.M.I.L.E Fund, Sundaram Select Midcap and ICICI Pru Discovery Fund
4. You can start new SIPs for increasing the SIP amount. Lets say you already have SIP for 5000 per month, you may add a new SIP of 2000 in same folio.
Hi Pankaj
Can you pls suggest a simple portfoli tracker which can be used for tracking investments( MF, Equity, Debt etc)
Regards
Manish
@Manish
You can download India Mutual Fund Portfolio Tracker from this page: http://www.pankajbatra.com/downloads
Hi Pankaj
Can you pls tell how to use this tracker?
regards
Manish
@Manish
You have to provide fund name, units and date of purchase. It fetches latest NAV from Internet to show the current value.