Which is the best Mutual Fund App in India? Many of you are getting advice to invest in mutual funds. Then the next question which will come to your mind is how we can invest in mutual funds. Whether there are any apps or websites which can offer us this service for free? Let us discuss this topic in today’s post.
Before blindly jumping into choosing the best mutual fund app in India, first try to understand why you have to invest in mutual funds at all. Is it just because your friend, colleague, relative, neighbour, or social media guided you to invest? OR it is based on your own research and found mutual funds are best?
There are certain myths associated with mutual fund investment or with these apps. Hence, first, let me clear these myths.
# SIP is NOT a PRODUCT
Yes, the majority of mutual fund investors feel that SIP is a product but not a way of investment. SIP in simple terms is a way of investment but not a product. Anything that you invest systematically must be called a SIP. Your monthly Bank RD is also a SIP. However, the financial industry forced us to believe that SIP means it must be in mutual funds not in any other instruments.
Don’t be in this wrong myth. Never believe in anyone BLINDLY when it comes to money matters.
# Need a Demat Account
This is one more myth propagated by a few middlemen. As the mutual fund units are by default in electronic format, you don’t need a Demat account to invest in mutual funds. In fact, by holding the units in Demat format, your charges will increase, and also service-related issues pop up in the future.
If you are holding the units in Demat format, then each service request has to be through the Demat provider not directly (from you to Mutual Fund Companies). Also, if you redeem the units, then the money will first be credited to the broker and then you need to withdraw.
One more hurdle is in case of a sudden demise of a holder, then the legal heir needs to open a new Demat account in his name, submit the death certificate and other required documents, and get the units transferred to the new Demat account. However, in case of non Demat units, your legal heirs Demat account requirement is not there.
Hence, the best idea is to avoid opting for a Demat account when you invest in mutual funds.
# Online OR Direct does not mean DIRECT Funds
Many blindly choose certain platforms which offer to invest in mutual funds online or tagline with direct (The classic example is ICICI Direct). Don’t follow them blindly. Neither ONLINE means direct nor DIRECT tagline with the firm does not mean direct.
If the platform is offering you DIRECT Funds then the name of the fund should be like for example UTI Nifty Index Fund Direct-Growth, then it is a direct fund. Just because the platform is providing you online facility and the tagline of the firm is DIRECT does not mean they offer you direct funds. They may be offering you REGULAR funds. Regular fund means they may be earning a commission on your investment.
# Safety of these apps
Many of these apps are registered with SEBI. They need to be either a registered mutual fund distributor (MFD) or a registered investment advisor (RIA). Cross-check this on their platform or with their name on the SEBI or AMFI website.
Do remember that if they are registered as MFDs, then they do not offer you DIRECT funds. They will obliviously be offering your REGULAR funds.
What if they close the shop today? No need to worry!! Your money is with mutual fund companies but not with these middlemen. They just act like platform providers. Hence, if they close the shop today, then choose a different platform to invest.
# FREE Direct Funds Offerings doesn’t mean FREE
If they are offering direct funds (where there is no middlemen cost involved) free of cost, then how are they sustaining their business? There are two possibilities here.
The first one is, they are offering you for free to garner their business or they may be a new entrant to this field. Once they achieve their target, then they may force you to charge some nominal fee. As the competition is very tight in this business module, they may be offering you free of cost.
The second one is, they may be indirectly pushing you to some other products or services where they earn handsome commissions like Corporate FDs, NCDs, or services like tax harvesting (a futile exercise).
Hence, you must be cautious about these FREE bees. Nothing is free in the financial industry. As there is a saying, if anything is offered to you for free, then you are the product.
However, SEBI recently mooted an idea that these platforms must not offer direct funds to investors free of cost. They either must charge to customers or to mutual fund companies. However, as of now, there is no clarity on this aspect. Hence, let us wait for SEBI regulation on this aspect.
If you are not KYC compliant, then you have to complete this process before the start of the investment. Unfortunately as of now, the government is unable to resolve this SINGLE window KYC for all financial services (even though a few years back CKYC concept was launched). How many days it will take is unknown to us.
If you are not KYC compliant, then choose the one which offers such a KYC process online. But it does not mean that you have to stick to the same app. Few use such online KYC providers for the sake of KYC completion. Once the process is done, then they choose the one which is comfortable for them. You can either stick to the one where you have completed KYC or move to the new one.
Best Mutual Fund App in India 2023
Now let us move on to the main topic of this post. First, ask these important questions for yourself before searching for the best mutual fund app in India –
- Your financial goal matters or mutual fund app matters?
- Your asset allocation matters or mutual fund app matters?
- Asset performance matters or mutual fund app matters?
- Risk management at your level and your behavior matters or mutual fund app matters?
- Mutual Fund matters or mutual fund app matters?
- Mutual Fund performance matters or mutual fund app matters?
When you ask such questions on your own, then obviously as per me, the app does not add value to your investment. But what process you follow for your investment matters a lot. However, I am not denying the fact that we need trustworthy, user-friendly, free, and direct fund offering apps. BUT….it should be your last criteria when you decide to start investing. Sadly many scratch their head on this aspect of searching for the best mutual fund app in India than scratching their head on the questions which I have raised above. Hence, before jumping into choosing the best mutual fund app in India, first do these basic homework of investments yourself. If you are not capable, then take the help of Fee-Only Financial Planners.
# Define your financial goals – It is the first step of investing.
# Identify the time horizon and the amount required (in today’s term) – This process helps you to identify the right asset classes and asset allocation among those asset classes.
# Do the asset allocation – Once you have a clarity about goals, time horizon and the amount required, then do the asset allocation like how much should be invested in debt or equity.
# Choose the right products within those assets – Once asset allocation is defined, then choose the products within those assets based on your requirement, risk appetite and more importantly products which you can understand. Avoid the products which you can’t understand (no matter how much returns they generated in the past).
# FINALLY…search for the right platform which helps you to implement your investment at free, direct, user-friendly and also reliable.
Noticed that in the above steps, choosing the platform or an app is a last step. However, many spend hours or days searching for the best mutual fund app in India.
At the same time, I am not neglecting the importance of platforms in mutual funds. But I am trying to say that this search is the least important aspect in your investment journey.
Many choose apps mainly because they want the information that should be accessible 24*7 at their fingertips. However, the more frequent accessibility to your investment leads to unnecessary action and the probability of you making the mistakes are high.
Whether you access your investment details 24*7 at your fingertips or access it once a month through logging into the website, this does not alter. You have to ACT before investing but after investing. Unfortunately many do the in-depth research post investment not before investment.
Many may be comfortable with apps than websites. It is individual choice. However, my idea of avoiding 24*7 accessibility for your investment information is that it creates a NOISE and CONFUSION inside you. Due to this, the probability of mistakes will be higher.
Then what are my views on these apps? I am not saying that you must not use apps. I am not saying that you must not look for the best featured platforms. What I am trying to say is that don’t spend a lot of time in search of this least effecting exercise of your investment.
Personally as of today, I am not using any apps or I have any monthly SIPs. All I have is Kuvera.in account (that also I will use as long as they offer at free of cost) and MF Central account. I spend around no more than 30 minutes to execute my monthly investments. I will track my investments using the excel which I have created as per my comfort. As I have adopted index investing both in equity and debt funds, I no need to track the performance 24*7.
My choices for you to use the platforms for investing in mutual funds are as below –
- Mutual Fund Companies websites or apps – Direct connection. But you end up with so many user names and passwords and also tracking in one place not possible.
- CAMS and KFintech – Better than the first one. However, again you end up having two platforms rather than a single platform. Because few AMCs tied up with CAMS and few with KFintech as their R&T Agents. CAMS offers you an app called myCAMS mutual fund app.
- MFU India – Backed by all AMCs. Best, long-lasting, and free option for you. However, sadly the process is cumbersome and the mutual fund industry never bothered to make it user-friendly for common investors. If private players can develop the best user-friendly platforms or apps, then why are not all AMCs unable to develop MFU user-friendly?
- MF Central – Recently launched by CAMS and KFintech. There may be certain service-related issues. However, I felt better than MFU.
- Few apps like Kuvera, Groww, Zerodha, or ET Money – Use them cautiously. Few like Zerodha offer you to hold the units in Demat format and which is unnecessary (as I have explained above). Even though many of these platforms offer you the service for free (only for investing in direct mutual funds), they may change their color as and when they wish. The classic example is when Paytm Money declared that it is surrendering its RIA license and becoming a broker to offer direct funds through the BSE Star platform. Because of this, investors with Paytm Money were forced to open a lifetime free Demat Account (even though Paytm Money claimed that units will not be in a Demat account) and do the re-verification of KYC.
Considering all these important points, I don’t think APP is a NEED for your investment in mutual funds in India. Use the websites like AMCs, CAMS or KFintech, MFU India or MF Central. Avoid these private players app as much as possible. Even though they may be offering you INSTANT, FREE, DIRECT FUNDS and USER FRIENDLY features at your fingertips, one day or another day for their survival either they may charge you or they may change the colour.
My views may look old to many young generations who are more comfortable with apps on their smartphones. However, my suggestion is that don’t be so fancy about apps. Instead fancy about saving, investing and doing it repeatedly for decades to create the wealth.
Refer our few posts related to mutual funds which we wrote recently –