A mutual fund is a simple investment option. However, many investors especially millennials are wary of investing in mutual funds as too many funds confuse them. They are also intimidated by the KYC process that needs to be done before an individual can start with investing in mutual funds.
There are two KYC process: e-KYC process and normal KYC procedure.
e-KYC is a KYC process that takes place through Aadhaar card. After Supreme Court disallowed the use of e-KYC in September 2018, the process is likely to be back after the Finance Ministry announced that the Aadhaar-based on-boarding would be allowed. This process was first launched on Dec 2016. The process can be done online. However, e-KYC comes with an investment limit. You won’t be able to invest more than Rs.50,000 in a financial year. This process is an easy process for investors who don’t possess a PAN card or investors who have recently joined the workforce.
There are no investment caps when you complete the traditional KYC process. This is an offline paper-based process and may take a few days. However, it is a one-time process and you don’t have to carry the process again to invest with a different fund house or through a different investment portal. If you have invested through a financial advisor, he or she will take care of the basic requirements.
However, if you want to invest directly in mutual funds without an intermediary, here are the steps that you need to take:
To summarise, here are the documents that you will need to complete the KYC process:
• KYC form
• Original PAN Card
• Original Address Proof
• Self Attested copies of the documents
• Cancelled cheque
The KYC process is a one-time process. Once you complete the process, you can invest in any mutual fund and set up systematic investment plans or do lump sum investment.
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