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Why Don’t You Need a Demat Account to Invest in Mutual Funds?

Updated on :  

08 min read.

It is not necessary to have a Demat account for investing in mutual funds. The only mandatory requirement is to complete the KYC formalities. Once you register your KYC with AMC or designated intermediaries, you need not re-submit the documents for future investments. 

Ways to Invest in Mutual funds

There are many ways through which one can invest in mutual funds :

  1. Broker – A broker provides a Demat account to trade on the stock exchange. If you wish to invest in multiple investment avenues like mutual funds, stocks, bonds, etc., it is advisable to have a Demat account to monitor all your investments in one place. Demat accounts charge annual maintenance fees and transaction fees which may vary for different brokers. 
  2. Asset Management Company – One can directly invest in the mutual funds of the respective AMCs through their website. Here, the drawback is that you can invest in mutual funds only provided by that AMC and no other AMCs. This mode limits the investment option to invest in various other mutual funds offered by other AMCs, making it less advisable. 
  3. Offline and online distributors – Offline distributors would provide you with acknowledging your investments through a physical format. As against this, online distributors offer a complete virtual experience of investing. All of the investment you undertake through them is curated in one place for a smooth and efficient user experience. 
  4. By net banking – Some private banks offer their account holders to invest in mutual funds through their net banking accounts. If you’ve financed through a bank, then it would show in your net banking as well.

Benefits of investing in mutual funds through BLACK

  1. Easy to register – BLACK provides a seamless online registration that takes less than 5 minutes to complete the process.  
  2. No cost involved– BLACK does not charge any fees from its customer. A small amount of distribution commission is paid to the distributor against investment, which is less than the Demat maintenance fees or any other charge levied by brokers. 
  3. Invest from anywhere globally – Being an online-based investment, one can download the app and access your account from anywhere in the world. 
  4. Customised investment plans: Our investment platform provides customised plans for you based on various factors like duration of investment, risk and returns, etc. 

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