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
Pankaj Batra

Jack of multiple trades. A generalist! Founder of Sparse Labs. Find me at FB, Twitter or LinkedIn .

Leave a Comment

View Comments

  • 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

    • @Karan
      I meant policy changes done by Govt, which are good for long term growth of India.
      Next few years should be good for economy.

  • 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

    • @Karan
      If you don't need that amount right now, I would advise you to stay invested; as amount may get further doubled in next 2-3 years

  • 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.

    • @Karan
      You don't have to pay any income taxe on this switch if you switch before 31st March 2018 or if your fund value is less than what it was on 31st Jan 2018.

  • 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.

1 … 4 5 6
Share
Published by
Pankaj Batra

Recent Posts

TransUnion CIBIL ran two credit profiles under my PAN. RBI Ombudsman closed the complaint

This is a factual account. Every date and quote below is from written correspondence I…

1 month ago

Automating my ITR-3 filing: generating the tax-return JSON from a spreadsheet

Every year around July–August, the same ritual: open the Income Tax Department's offline ITR utility…

2 months ago

AU Bank Enables Digital Remittances for Overseas Equities (Purpose Code S0001)

In my previous update on cross-border investing, I broke down how I secured a zero…

2 months ago

Hunting for Value: My Overseas investment Experience with Zero Forex Markup via AU Bank and Paasa

In my last finance update, I documented the exact timeline of executing my very first…

5 months ago

Holding Banks Accountable: My ₹5,000 Win Against IndusInd Bank’s Systemic Negligence

Introduction: Most bank customers accept a credit card rejection as "final." But what happens when…

5 months ago

Experience of First investment in international ETFs via IBKR

After spending quite a few days researching platforms and figuring out the best way to…

6 months ago