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How to Invest in a Mutual Fund

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					Title:

How to Invest in a Mutual Fund

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Mutual Fund, Fund, Procedure, How to, Mutual Fund, Fund, Procedure, How
to

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 A step-by-step procedure to make your first mutual fund investment

Step header:

Decide on a Fund

Step Point:
1) What is expressed as a simple phrase here, is probably the most difficult step of all!
Arriving at a good fund to invest in, is both a science and an art. Nothing like doing a bit of
research        and      reading       yourself,      to    help       you       with      this
2) Make sure you that the fund you have selected is suited to your requirements and risk
appetite
3) If investing in Systematic Investment Plans, make sure the fund you have chosen allows
this option

Tool tip:
The only thumb-rule that is worth mentioning is 'avoid new fund offers (NFOs)'. This works
in 99% of the cases

Step header:

Complete Application Form

Step Point:
1) Application forms are available for download from the fund website. You can also get a
physical            form             at           your           broker's           place
2) All you need to complete your application form is to put down your name, date-of-birth,
address and bank details. You should also complete details of your investment
(cheque number,                       amount,                     scheme                name)
3) Make sure you attach a copy of your PAN card in all cases. And your KYC verification
sheet
4) Some people have the habit of having their broker fill the form. This is fine, provided you
look through it thoroughly after it is filled. Do not sign blank forms or cheques

Tool tip:
Often debt and equity schemes have different forms make sure you have the right one!
Also, sometimes the SIP form differs from the normal oneNomination is not compulsory, but
make sure y

Step header:

Write Cheque

Step Point:
1) Cheque is the best way to pay for the investment or first instalment. Auto debit or
standing instruction can be used for subsequent instalments in case of SIP
2) The name to be written on the cheque is typically given in the application form or
prospectus




Tool tip:



Step header:

Deposit the Filled Form

Step Point:
1) You can deposit the form in the nearest office of the mutual fund you are investing in
2)        Alternately,        a        service centre of        CAMS           (in          case
of HDFC, ICICI, SBI, Birla, DSPBR, IDFC, Kotak,                           TATA, Canara, ING,
L&T, Sundaram mutual         funds      )      or Karvy (in   case       of     Reliance, UTI,
Axis, Religare, JM mutual funds) can execute your investments and other transactions
3) You can also hand over forms to your broker. However, in such a case, make sure your
application form and cheque are fully filled. Never leave anything for the broker to fill in your
absence!
4) If you are really finicky about getting a particular day�s NAV, you need to deposit liquid
schemes by 12 noon and others by 3pm of that working day. Other investors can ignore this
point

Tool tip:



Step header:

Use Transaction Slips for Other Activities

Step Point:
1) In the website of the mutual fund, or with the broker, you will find transaction slips that
allow you to make subsequent transactions in the fund’s redemption, switch, bank account
change, etc
2) In your own interest, you should quote your folio number if making subsequent
transactions in a fund. The fewer folios you have, the easier is your portfolio to manage

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posted:10/4/2012
language:English
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