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.
Also apart from that, SEBI has also removed entry load from all mutual funds from August, 2009. There will be no entry load on any mutual fund schemes from now on. Distributors will now have to disclose commission for schemes.
If you are making investment in MF (lump-sum or SIP) and you route your application through a broker (online trading accounts like Kotak, ICICI direct etc.) or agents, You can be charged service fees or brokerage other than the application amount.
To avoid paying the commission/brokerage or service fees, 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 may be charged service charge 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/service charge/brokerage:
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
DSP BlackRock 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
hello pankaj
thanks for this site. it gives lots of information to those new in investments.
i want to invest in Mutual Fund through SIP directly to avoid entry load.
i m from delhi. can u pls provide me the adresses of SBI Mutual Fund,Reliance ,Sundaram ,HDFC in Delhi.
thanks
awaiting your reply
Shirz
Shiraz,
You can download forms for the mutual funds from the below links:
SBI: http://www.sbimf.com/downloads_application.asp
Reliance: http://www.reliancemutual.com/Downloads/Content.aspx?ReportID=bc167942-4b6e-4a35-8e35-0ced81ad36b1
Sundaram: http://www.sundarambnpparibas.in/dwnapp/dwnapp.htm
HDFC: http://www.hdfcfund.com/Downloads/ApplicationForm.aspx?ReportId=CF5CD6D4-A526-4503-B0C0-74D3EF9CA779
Take printout and submit the forms to following address:
CAMS, 304-305, III Floor, Kanchenjunga
18, Barakhamba Road
New Delhi – 110 001.
Phone: 011-3048 2468, 69, 70, 72
Karvy, 105-108, Arunachal Building
19 Barakhamba Road
Connaught Place
New Delhi
Regarding online investments, when do you actually pay for the mutual fund as in when you submit the application to the AMC you have to give a check or once you submit the application(without giving a check), then you start buying online?
Thanks for the nice write up.
In case of online investment, you pay instantly thru your online banking login (in which you have your savings account). Money is deducted at same time and units for MF are also allocated same day if its before 3 pm.
Your blog appears quite informative. Can you please tell me how can I read your rss blog?
regards
Hi Pankaj,
At the outset, great work indeed. Very helpful, crisp information.
Thanks a lot for so many information’s that too without any dalal stuff.
Question:
Pankaj, please help me in this situation. I want to invest 1000 rupees per month for a period of around 15 to 20 years. This amount pay increase in coming years, i can’t say now but 1000 is the amount which i determined to invest every month for say around 15 to 20 years, please advice me which saving plan should i choose?
One thing, i am not intrested in 80 C saving as it is already more than 1 lac, if incase this saving goes out of 80 C section i wont mind.
Looking for a realy reply.
Regards.
Mitesh
Hi Mitesh,
If you want to invest 1000 Rs per month for next 15-20 years. You must invest in mutual funds.
However, divide 1000 rs into 2 parts and invest one part into hybrid mutual funds and rest into pure equity based. This will make sure that your portfolio will is somewhat safe in recession kind situations like the current one.
— Pankaj Batra
Which are top 5 rated MFs having past record of high divident payouts. Kindly advice.
Thanks.
Excellent pieces of information .
Sincerely appreciate your endeavour and research work towards consolidation of important informations .
All the best ,
Alokmoy De
Hi, very nice post. I have been wonder’n bout this issue,so thanks for posting
Hi Pankaj
Your site is really good.
I need some help on TOP ELSS & non Tax savings scheme too.
& also let me know buying MF’s through Reliance money or HDFCMF online have entry load.
can we buy other MF’s from HDFCMF
Regards
Aryan
for ELSS, Sundaram Tax Saver, Magnum Tax Gain Scheme and Franklin India Taxshield are good schemes to invest in.
Buying MFs thru Reliance money will attract entry load.
Buying mutual fund from HDFC mutual fund site (https://investor.hdfcfund.com/mfonline/) will not attract any entry load but you can not buy other Mutual fund than HDFC’s from their website.
Once you’ve started an SIP do you know how to get a performance statement that indicates the CAGR/XIRR?
I know I can get a statement from Karvy/Cams but the problem is I have I have to get 2 statements, they do not include Franklin Templeton and Cams does not handle dividend payouts well.
Robbie,
Its better that you get a login on the Mutual Fund website directly by applying for PIN. There you can login and get all detailed statements.
Hi
1. What to do if we already have started the SIP in MF through a broker. Can this be converted to no entry load option?
2. Can two SIPs be started in same MF?
@Manish,
1. If you already have SIP in mutual fund though a broker, you can stop the SIP by requesting to mutual fund company.
2. yes, you can apply in same mutual fund though two SIPs.
Hi Pankaj
Can the same MF account(opened through broker) be converted to “No entry load” account? I mean if i stop the SIP of the first MF account (opened through broker) and start another SIP on my own in the same MF then can i continue the second SIP in the first MF account itslef? or i need to close the first MF account by reediming the units and then open another MF account and start the SIP again in the new account?
@Manish,
You can stop the existing SIP and start a new SIP. However you may use the same Folio number as with earlier SIP. There is no need to redeem the existing units as because of same Folio number, units will accumulate in same account. Just apply directly with them with existing folio number and writing DIRECT in broker code.
I’ve taken some ELSS mutaul funds last year, without any broker, directly at the CAMS office. How can i sell my units after 3 years.? If my bank account changes by that time , what should i do .? Is it mandatory to sell tax saving ELSS schems exactly after 3 years or at anytime after 3 years..? Can i show my previous year ELSS schemes for this year tax saving also..? Pls clarrify me..
@Sreenivas,
You can opt for HPIN login on mutual fund website, Using which you can redeem mutual fund online.
Otherwise you have to fill a redemption form and submit at CAMS office. For bank account change, you have to submit a bank account change form.
Its not mandatory to sell ELSS funds after 3 years, You cannot sell before 3 years but you can sell anytime after 3 years.
For tax saving only investments done in that financial year, for which you are filing return; are valid.
Pankaj, thanks for the information.
I want to invest in ELSS and selected the below MFs.
1. Can Robeco Equity Tax Saver
2. SBI Magnum Tax gain
3. Birla SL Tax Relief 96 (D)
3. Taurus Tax Sheild
4.Principal Personal Tax Saver
Pls Suggest me whether these are ok..Or need to change any of the above..I already Invested in Sundaram Praibas Tax Saver last year, but now it’s only 21% up where Can Robeco and Taurus are almost 50% up since last year. That’s why instead of continuing in Sundaram , i’m plannig to go for Can Robeco and Taurus.
Will those two give good returns after 3 years..?
ansd correct me if my decission was wrong..
Thanks,
Sreenivas.
@Sreenivas,
Everybody has his own assumptions, Nobody can tell how market or a fund will perform in future, So its difficult to say which funds are best.
I am currently invested in following tax saver funds:
Sundaram BNP Paribas Taxsaver, SBI Magnum Tax Gain, Principal Personal Taxsaver, Franklin India Taxshield, PRINCIPAL Tax Savings Fund, Franklin India Index Tax Fund, HDFC Tax saver and Franklin India Taxshield.
The parameters on which I research and find mutual fund where to invest are : Return over last 5 years, 3 years, 2 years, 1 year, 6 months and AUM (assets under management). What I do is pick top 5 performers from all the above parameters and whichever mutual fund name appears most in all is best according to me.
As you cannot predict markets after 3 years its better to go with funds which have seen bad and good both times. Some new funds may appear attractive as of now but at a later time, they may be heavily down. Like Principal mutual fund was giving excellent returns last year but when market collapsed, it was more negative then others (more risk, more profits, more loss).
If i want to invest again in the same ELSS MF which was taken last year, can i purchase with the same folio number.
If so, where should i mention that in application form..?
@Sreenivas,
Yes, you can use the same Folio number for investing in same Mutual Fund company.
Lets say even if you invested in X scheme of ABC Fund House with Folio No 9876, you can continue using the same folio number in any new transaction with this mutual fund company.
In application forms, you should mention this in existing Folio number field.
Hi
from 1st aug`09 the entry load will be scraped from all MF.. Is this true? is this applicable for the MF for which SIP started before 1st Aug`09? my broker has told me that it is true and applicable for MF for which SIP started before 1st Aug`09
@Manish,
Yes, from Aug 09, entry load from all mutual funds will be scrapped and also its applicable for all mutual fund transactions after 1st Aug’09 even if the SIP started before that.
Hi Pankaj,
How do i link all my MFs SIP so that i can get one combined e-statement( monthly/quarterly) for all of them. Also i want to stop the paper based statements for all my MFs. How to do that?
Regards
Manish.
@Manish,
There is no provision form Mutual fund side so that you get a combined statement from all mutual funds (all means here different mutual fund companies).
But If all of your mutual funds are through CAMS, you may use their tools here: https://www.camsonline.com/invmail.html.
If you have registered your email in all mutual funds, you can ask them to send only e-statements. CAMS even sends links automatically to do so to save papers.
There are portfolio management sites also where you can register and maintain your portfolio and there you can see monthly/quarterly profit/loss. I also have a mutual fund management excel sheet, which automatically fetches latest NAV and gives you latest profit/loss statement.
Is investing in ULIPs a good option if we compare it with investing in MFs?
@Manish,
No Manish, ULIP is a bad option.
Better get a term insurance and rest of the money invest in mutual funds.
🙁
I took ULIP. Forgot to consult
It is really bad
Can you please share with me the url of the best “portfolio management site” and/or the mutual fund management excel sheet which you have.
I have a ULIP of Max Newyork life which i started on Jan2006. As you suggested ULIP is a bad investment option hence what would be your suggestion for this ULIP.
@Manish,
Please download mutual fund tracker excel from here: India Mutual Fund Portfolio Tracker
for online portfolio management, you may visit Moneycontrol or Value Research Online
As you have already completed 3 years with your ULIP, you may keep that as it is and not invest more amount in that but don’t surrender now as it will not give you back even what you had invested. Let it grow and take out when you need the money.