What do you think are the essential factors to start investing in mutual funds? A Demat account and a trading account? No, it’s not just about opening a Demat account and a trading account to start investing. There are many more elements that are equally important, like money, the internet, knowledge about mutual funds, and the necessary procedures, which include selecting mutual funds, payment to finalize the investment, and how to do your KYC for mutual funds? Here, we will discuss things related to KYC for mutual fund investments.
How to do KYC for Mutual Funds?
Please send copies of the verified photo with the KYC Application form to the mutual fund company or brokerage firm you chose to invest with, going to its offices. After you have completed the KYC process through the online or offline KRA, you will be given a KYC ID number which you can share with the chosen investment platform to start investing. Once your KYC is registered and verified, you will get confirmation through an email/letter. In case you are unable to invest in a Fund, then it may be due to some issues with your registration process, so it is necessary for you to verify the status of your KYC. As the KYC, or Know Your Customer Us, is completed in just a few minutes, you can immediately begin investing in mutual funds. After entering OTP, Common KYC will get completed, and you can start investing in mutual funds within minutes. Once online KYC is completed for Mutual Funds, an investor is immediately allowed to start investing in mutual funds. Investors are required to undergo KYC processes when investing in mutual funds as the fund houses need to ensure the nature of money being supported via their platforms.
Importance of KYC Process
To be able to make any investments with the mutual fund houses, investors must be assured of being a Demat account holder and KYC-compliant in relation to the mutual funds. During the KYC process, individual investors are required to submit certain documents in order to establish their identity with fund houses. Once the KYC is completed adequately on all fronts, an investor is required to submit a copy of the KYC acknowledgment with the fund in which the investor wants to invest. The investors should attach the KYC acknowledgment with the Investment Application form(s)/Transaction Slip(s) when investing in each fund for the first time.
Remember, becoming KYC verified investors gives a higher level of security. You can start investing in Mutual Funds without any tension. Every mutual fund investment or any investment dealing in stock markets, banks, and any official regulated markets of a government has mandatory acknowledgment of your Customer A or KYC. KYC is compulsory in order to ensure that investments made are not of any fraudulent nature, thus preventing cases of money laundering and fraud in the future.
Benefit of EKYC
For investors in mutual funds, e-KYC raises the annual investment cap. You can check out a company’s many offerings and programs thanks to e-KYC. The registration process is sped up and simplified via e-KYC. The Assets Management Company’s worth is raised by e-KYC (AMC).
Mandatory KYC
E-KYC is an alternative to the traditional KYC process for investing in mutual funds. The paper-based KYC procedure involved submitting paper papers, including a completed KYC registration form signed by the potential investor and copies of identity-proofing documents that had been self-attested, like a PAN card or driver’s license. The next step was physical verification at the regional KRA office or the broker, the investor, intended to use. All of that is about to change with e-KYC.
Currently, uniform KYC compliance is compulsory for all potential individual customers/investors wishing to open an account with the mutual fund, regardless of investment size. To ensure consistency in the KYC process and remove the need for investors to go through the KYC process repeatedly while opening accounts at various financial intermediaries such as mutual funds, equity brokers, depository participants, etc. IIFL has a standardized process, once completed, is applicable to investments made by mutual funds in all fund houses.
To Sum up.
KYC records are maintained by entities registered under SEBI known as KYC Registration Agencies (KRAs). Investors looking to invest in mutual funds can go to the stockbroking apps or KRAs website and fill in all details on the KYC forms while creating an account. So, next time you get a question about how to do KYC for a mutual fund. In answer to that, you only need to provide your Aadhaar and PAN number, email address, and mobile number to get started. As soon as you enter the information, an OTP will be sent to the mobile number associated with your Aadhaar. The eKYC procedure will be finished after entering the OTP, and you can begin investing in mutual funds immediately.