How Mutual Fund Investments Are Going the Digital Way

A whopping 50% of India's total mutual fund investors started investing in the last 4-5 years! Wondering why? Let's see.

While the finance industry always relied on technology, the past five years ushered in rapid digital transformations in the investment sector. Besides, the pandemic accelerated these advancements, as platforms adopted tech-friendly strategies to make mutual fund investments more accessible for investors.

No wonder, with each passing day, do-it-yourself (DIY) investment solutions are gaining immense popularity, transforming the way investors like you grow your wealth. Moreover, there's a sharp rise in the participation of MF investors from India's tier-2 and tier-3 cities.

That's because, with burgeoning digital platforms, investors can conveniently complete customer onboarding with digital KYC, invest via SIPs, exit investments, redeem units, and whatnot.

So, as India leaps towards investing in mutual funds the digital way, let's look at some advantages of making investments digitally.

Benefits of investing in mutual funds via digital platforms

#1 Conduct customer onboarding digitally

To start investing in MF schemes, you must provide your Know-Your-Customer (KYC) details to your investor firm. When making MF investments through a digital platform, you can easily share your details online. Upload photocopies of your PAN or Aadhar card, age proof, residence proof, other documentation and Voila! Your mutual fund account is up and running!

Additional Read: What is the Difference Between AMCs and Mutual Funds?

#2 Compare multiple fund schemes

When investing in MF schemes, you can select from a broad spectrum comprising large-cap, mid-cap, small-cap, multi-cap, liquid funds, credit risk funds, low duration funds, debt funds, and more. You can weigh up fund schemes across basic attributes, including investment horizon, category, quality, past returns, fund risk grade, investment information, ratings, etc., online.

Or dive deep by thoroughly comparing factors like asset allocation, withdrawals, scheme portfolio, and more.

Moreover, with Tata Capital's Moneyfy app MF scanner, you can search for a fund as per your preferred parameters. This easy-to-use tool enables you to shortlist funds across fund category, minimum investment, fund type, rating, rated by, etc.

#3 Start your investment journey

After choosing a mutual fund, start investing with SIP or Systematic Investment Plan. SIP in mutual funds is a popular investment choice among investors lately. Here, you invest small amounts in your selected mutual fund scheme periodically. When you activate a SIP, a predefined amount is automatically debited from your registered bank account every month.

You can also set up the auto-pay feature to make automated payments through billers, eNACH, NACH mandates, etc. Besides, with SIPs, you'll spread your investments in your mutual fund over time with small monthly/weekly/quarterly/half-yearly payments compared to a lump sum.

#4 Use a SIP calculator beforehand

If you invest via SIPs, you can use a SIP calculator to figure out the returns you'll earn on your mutual fund investments. These calculators give you an estimate on the maturity amount, expected returns, and wealth gain on your mutual fund investments, based on an annual projected return rate.

Additional Read: 5 Misconceptions about Mutual Funds in India

Over to you

Looking to venture into mutual funds? Get started with your one-stop digital solution for all your financial goals- download Tata Capital’s Moneyfy app and become investment-ready within minutes!