in Finance, Investment, Mutual Funds

Mutual Fund Investment with zero entry load, brokerage and service charge.

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

Facebook Comments

Write a Comment

Comment

108 Comments

  1. Hello,

    I am new to MF investment and interested in investing around Rs 2000/month in SIP.I have HDFC account and interested in linking the SIP to my account.How to start up with ? Is that possible to register for SIP through online ?

    • @Sunil
      Yes, you may get SIP deduction from your HDFC bank account. You would need to provide ECS mandate and cancelled cheque from HDFC account.
      Further You can also register SIP online with Mutual fund company added in bank account as a biller.

      • Hello Pankaj,

        Thanks for your response.Can you provide me the link wherein i can register for Mutual Funds online ?
        Also if i try to register in HDFC online it is asking for folio number which i don’t have.How to get that online ? is that possible ?

        • @Sunil
          You would have to apply through physical forms only for first time. Along with it fill application for HPIN generation which would be used for login on mutual fund website.
          Once you have folio and HPIN, you would be able to start online SIPs.

          First time paperwork has to be done for folio generation.

  2. Dear pankaj,
    i want to invest some amt.
    so please help me in investing.
    please suggest me some obtions.

    Thanks and Regards
    Ravi R

  3. Hi Pankaj,

    I want to invest Rs.2000 pm either in mutual funds or SIP for better returns. Please suggest me what should I opt.

    Thanks & Regards,
    Jeetendra

  4. hello

    I want to invest some amount every year in MF but i dont able to do it per month.i am able to invest 1 lac per year so please suggest me how can i do it and which are the best fund for me as goal is for long term.

    • @Rahul
      Its not advisable to invest lumpsum into mutual funds as its difficult to time the market for best price.
      You can invest into into debt/liquid mutual funds and start STP (systematic transfer plan) to equity mutual funds.
      You can pick one best fund each from different categories like Large cap, Mid and small cap etc.

  5. Dear experts,
    I invested Rs 5000/- thru SIPs in Nov 2010 in the following MFs :-

    HDFC Equity (G) : 2000/-
    Reliance Equity Opportunities (G) : 2000/-
    BSL Midcap Fund Plan A (G) : 1000/-

    Thereafter, I started few more funds and closed my BSL SIP, due to under-performance as under in Feb 2012 :-

    Franklin India Bluechip (G) : 2000/-
    Fidelity Equity (G) : 1000/-
    UTI Equity (G) : 2000/-
    Canara Robeco Equity Diversified (G) : 1000/-

    So, totally i invest Rs 10000/- as on date in MF thru SIPs. Now my queries are as under :-

    I have a long term plan of investment, atleast 20-25 yrs. Is my portfolio fine for this duration?

    If any changes are required, pl suggest !

    My HDFC Equity and Reliance Equity Opportunities SIPs will expire in Nov 2015. So shall I continue with further investments thru SIP mode for the next 20-25 yrs? Selection of funds will be done then, not now I am certain !

    Lastly, I intend to invest another 3000/- thru SIP mode with immediate effect. But I am confused whether I should invest in Dividend Yield funds like Tata or ING to bring some stability in my portfolio OR Shd I begin to invest in Equity like UTI Opportunities (G) or maybe more riskier Sector funds like SBI Magnum FMCG (G) ?

    Your reply shall be eagerly awaited. Hope You will help me like many others ! Thank you

    • @Surendra
      Your fund selection is good and you may continue your SIPs. You should stay invested for long term for good growth.
      But you should re-look your portfolio once every 1/2 years to check which funds are performing and which are not. Stop SIPs which are under-performing and start new ones.

      Dividend yield and UTI opportunities are funds in same large and mid cap category. In this you already have exposure through Canara Robeco equity diversified.
      You may consider adding a Gold ETF/fund or Equity ETF (in case you have demat account) to further align your portfolio.

  6. I want to start SIP of 5000/- plz tell whats will be the funds.I hav demat a/c what will be better MF s for 20 -30 yrs of target.

  7. hello pankaj sir,
    My question is on redemption. If i redeem my fund direct with cams/amc then is there any advantage & if i go to Broker/Agent then what is the disadvantage.
    So commission amount will be saved by me??

    • @Sam
      There is not much difference on redemption.
      You would get your redemption amount back after deduction of any exit load and STT, if applicable.
      Only difference would be time it takes. Online redemption before 3 pm would be processed same day and you will have amount in your bank in 2 days (in direct transfer is enabled).
      In case of manual submission of redemption to broker, he may submit it next day.

  8. Hello sir,
    i have BSL SPECIAL SITUATION GROWTH =(-2.13%)returns
    Rel Infra=(-27%)returns
    SBI Infra=(-15%)returns
    Tata Indo Global growth=(-26.51)
    Can u guide me where can i switch these and recover the returns immediately

  9. Hi Pankaj,
    i made an investment in a mutual fund (SIP) before august 2009 and still continuing. recently noticed entry load is charged till now. is this as per the SBI guidelines?

    • @Shruti
      SEBI circular issued has no clarification over the entry load removal’s applicability to existing investors who started SIP before August 2009. This is the loophole which the mutual fund companies (AMC) have been using to charge older SIP investors an entry load.
      You have to call AMC and may have to fill form for removing entry load if you want to continue with same SIP.

  10. Hi Pankaj,

    I need info about ABSL ESF – Gr. DIRECT .I invested this MF and gain 30% .
    I am planning to redeeem and that money will use for loan emi reduction.
    PLease let me know this is right time to redeem this MF.
    I invested in at time of launch means 2008.

    karan

    • @Karan
      I think its better to stay invested in equity mutual fund as of now as its expected to grow at a good rate due to policy changes.
      Loan EMI should be a very rate of interest, you can expect to earn much more than what you pay in home loan if kept in equity funds.
      However, you can switch to a better mutual fund as your investment fund has not performed very good compared to peers.

  11. HI Pankaj,

    Thanks a lot.
    I am not getting it clearly due to policy changes in your reply. Please tell me more about it.

    I think its better to stay invested in equity mutual fund as of now as its expected to grow at a good rate due to policy changes

  12. Hi Pankaj,

    I invested in reliance , hdfc tax saver mutual fund logn back means 2007 and I am getting now 3x gain.What is right right time to redeem?. What is max gain can expect ?

    Regards
    karan

  13. Hi Pankaj,

    I am wants to switch from birla mutual fund to HDFC fund.
    I invested in biral cost price 516506.02 and current value 665576.28 ( i didnt get much gain).
    10% tax is aplicable after march or if i am doing this switch I will have to pay this new 10% tax( i invested 4 year before).
    Let me know other way to do it more efficiently.

  14. Hi Pankaj,

    I invested in liquid fund based on short term needs
    hdfc liquid fund direct plan daily invested valuation 32,427 cost 32425
    hdfc liquid fund direct plan growth option valuation 177339 cost 170000

    birlas
    ABSL Cash Plus – Growth-DIRECT valuation 92316.69 cost 90000.00
    ABSL Cash Plus – Daily Dividend-DIRECT -Reinvestment valuation 328063.57 cost 328063.28

    May be i will have to withdrawal this full amount in april or may month.
    What is your suggestuion should continue or should withdrawal now
    is there any tax 10% on this.

    Regards
    karan

    • @Karan
      Liquid funds are not equity based and all gains for less than 3 years are taxable as per your tax slab.
      10% tax is introduced for equity based mutual funds whose gains were tax exempt, if sold after one year.