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How to do KYC for your mutual fund investments

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:

  1. Download the KYC form from any mutual fund website, registrar and transfer agents (RTA) such as CAMS or Karvy or Association of Mutual Fund (AMFI). Click here to download the form.
  2. Print and fill the form.
  3. You can visit any RTA branch or mutual fund office to complete the process. But before you go, you need to keep a few documents handy.
  4. Make sure that you have your PAN card with your photo. If your PAN card does not have your photo, then you have to carry a passport or driving license that has your photo. However, PAN is exempt if the investments are not going to be more than Rs.50,000 in a year.
  5. Also, you need to carry an address proof. It can be a rent or lease agreement, electricity bill, telephone bill, gas bill etc.
  6. Carry self-attested copies of the documents along with the original ones for verification. If original documents are not available with you, then the copies have to be attested by a certified person.
  7. In-person verification is another step in the KYC process. The process can be completed through a video call where you have to show the original documents to the camera. Company representatives may also visit your residence for the same.
  8. Next comes the verification of your bank details. You have to submit your cancelled cheque so that the officials can verify your bank account number and other details. On the other hand, Re 1 may be credited to your account to check that your bank account.
    Once all the verification process is over, you are now KYC complaint investor. You can invest in mutual funds of your choice without any limitations.
    Online investing platforms like Paytm, lets you complete the KYC process without stepping out of your house.

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.


Related Articles:

ABCs of Mutual Funds

Here’s why you should invest in mutual funds through SIP

Should you invest directly in Stocks or Equity Mutual Funds?


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