mutual fund direct plan This is for those investors who want to invest on their own and not through a distributor. They get the benefit of lower expense ratio as compared to regular plans. This low expense ratio gives comparatively higher returns over a period of time.

online investment

Investment can be made on the online platform of Fund House or Registrar & Transfer Agent (RTA) or any common platform such as Mutual Fund Utilities (MFU) or stock exchange platform or other mutual fund platform and portal. One cannot opt ​​for a direct plan if the investment is being made through a distributor platform. While filling the online form, the investor has to select/actively select the “Direct” plan option.

offline investment

One can invest by physically filling the Mutual Fund Application Form and writing “Direct” in the blank space provided to fill the ARN of the Distributor in the Application Form. If the ARN is already filled in the form, the investor can deduct the ARN and write “Direct” in bold at the top of the form. The application form along with the investment instrument can be submitted to the nearest mutual fund branch or RTA office for further processing.

switch to direct plan

Investors also have the option to convert their existing investments from regular plan to direct scheme by filling a switch request. This can be done online and offline. Switching of units essentially requires redemption from existing investment and purchase in new investment and thus the same is taxed in respect of capital gains tax and exit load.

noteworthy

• If an investor is not well acquainted mutual funds And need help choosing the right investment, it is advisable to invest through regular planning and a distributor who is trained to guide the investor.

(Content on this page is courtesy of Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Aarti Bhargava and Labh Mehta.)