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
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View Comments
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.