How to Invest in Mutual Funds/ SIPs in India
- Manan Mehta
- Nov 20
- 5 min read
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How to Invest in Mutual Funds/ SIPs in India
Investing in mutual funds in India has become remarkably simple—you can start with just ₹100 and complete the entire process online in under 30 minutes.
This guide covers everything from choosing the right platform to making your first investment, ensuring you avoid costly mistakes that plague beginners.
Step 1: Complete Your KYC (One-Time Process)
KYC (Know Your Customer) is mandatory for all mutual fund investments in India. Without it, you cannot invest a single rupee.
What You Need
PAN Card (mandatory—no exceptions)
Aadhaar Card (linked to mobile number)
Bank account details (cancelled cheque or statement)
Passport-size photograph
Valid address proof (if different from Aadhaar)
How to Complete KYC
Option 1: e-KYC (Fastest—15 minutes)
Visit any MF platform (Groww, Kuvera, Zerodha Coin)
Enter PAN and Aadhaar details
Verify via Aadhaar OTP
Upload selfie
Done—instant KYC approval
Option 2: Through CAMS/KFinTech
Visit camsonline.com or kfintech.com
Complete paperless KYC
Valid across all fund houses
Important: Check Your KYC Status
KYC Validated: Documents verified directly from issuing authorities (PAN, Aadhaar). You can invest seamlessly across all platforms.
KYC Registered: Documents verified but not from issuing authorities. May need resubmission when switching platforms.
KYC On-Hold: All transactions blocked. Must update PAN-Aadhaar linking and contact details.
Step 2: Choose Your Investment Platform
You have two main options: third-party platforms or direct AMC websites[Source article].
Third-Party Platforms (Recommended for Beginners)
Top Platforms:
Coin | Kuvera | ETMoney | Groww | INDMoney | MFUtility | Paytm Money | |
Direct Mutual Funds | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Fees | Demat & AMC fees | 0 | 0 | 0 | 0 | 0 | 0 |
Goal Setting | Yes | Yes | Yes | No | Yes | Yes | Yes |
Tax Calculation | Accurate | Accurate | Accurate | Accurate | Accurate, For Prime members only | Accurate | Accurate |
Skip SIP | Yes | Yes | Yes | No | Yes | Yes | Yes |
Family account | HUF | Yes | No | No | Yes | Kinda | Yes |
All platforms above offer direct plans only—crucial for maximizing returns.
AMC Websites (For Single Fund House)
If investing only in one fund house (not recommended), use their direct website:
HDFC MF, ICICI Prudential MF, SBI MF websites
Downside: Need multiple logins if diversifying across fund houses
Step 3: Understand Direct vs Regular Plans (Critical!)
This single decision impacts your returns by 30-50% over 20-30 years.
Direct Plans (Always Choose This)
Buy directly from AMC or through platforms like Groww/Kuvera
No middleman commission
Expense ratio: 0.5-1.5%
Higher returns over time
Regular Plans (Avoid)
Bought through distributors/agents
Includes commission (0.5-2% annually)
Expense ratio: 1.5-2.5%
Lower returns—commission erodes gains
Example Over 20 Years:
₹10,000 monthly SIP at 12% returns:
Direct plan: ₹99.9 lakh
Regular plan: ₹82.4 lakh (1.5% higher expense ratio)
Loss: ₹17.5 lakh!
How to Identify: Direct plans have "Direct" in the fund name. If you don't see "Direct," you're buying regular plan—STOP.
Step 4: Select the Right Mutual Fund Type
Match fund type to your goal timeline:
For Goals 0-3 Years Away
Liquid funds (emergency fund, instant liquidity)
Ultra short-term debt funds
Conservative hybrid funds (max 20% equity)
For Goals 3-7 Years Away
Short-term debt funds
Balanced advantage funds (dynamic equity-debt mix)
Conservative hybrid funds (25-30% equity)
For Goals 7+ Years Away
Flexi-cap/Multi-cap funds (diversified equity)
Index funds (Nifty 50, Nifty Next 50)
ELSS (tax-saving with 3-year lock-in)
Sectoral/thematic funds (advanced investors only)
Step 5: Decide Investment Mode
SIP (Systematic Investment Plan) - Recommended
What: Fixed amount invested monthly/quarterly
Minimum: ₹100-500 per fund
Best for: Salaried individuals, disciplined investing, rupee cost averaging
How to Start:
Select fund on platform
Choose "SIP"
Set amount (₹1,000, ₹5,000, ₹10,000)
Choose date (7th after salary credit recommended)
Set up auto-debit (mandate registration)
Duration: Perpetual or fixed (e.g., 10 years)
Advantages:
Averages purchase cost over market cycles
Disciplined investing—automation removes emotions
Start small, increase gradually
Can skip/pause if needed
Lump Sum - For Windfalls
What: One-time large investment
When to use: Bonus, inheritance, matured FD proceeds
Risk: Market timing matters—invest during corrections
Strategy: Don't time the market. Use STP (Systematic Transfer Plan):
Park lump sum in liquid fund
Transfer fixed amount monthly to equity fund over 6-12 months
Averages entry, reduces timing risk
Step 6: Make Your First Investment
On Groww (Example):
Download app, complete e-KYC
Go to "Mutual Funds" tab
Search fund (e.g., "Parag Parikh Flexi Cap Direct")
Click "Start SIP"
Enter amount: ₹1,000
Choose date: 7th of every month
Select payment mode: Auto-debit
Create mandate (one-time UPI authentication)
Confirm—SIP active
First SIP processes immediately. Future SIPs auto-debit monthly.
On Kuvera/Zerodha Coin:
Process nearly identical:
Search fund → Choose SIP/Lump sum → Enter amount → Set auto-pay → Done
[Source article]
Step 7: Monitor and Rebalance
Monitoring Frequency
Weekly: Not needed—creates anxiety
Monthly: Quick check on dashboard
Quarterly: Review goal progress
Annually: Detailed review and rebalance
When to Rebalance
Asset allocation drifts >5% from target
Goal timeline changes (marriage postponed, child's education preponed)
Fund consistently underperforms category for 2+ years
Better alternative fund emerges
When NOT to Stop SIP
Market crashes (best time to buy cheap)
Short-term underperformance (1-2 quarters)
News panic (war, election uncertainty)
Rule: Continue SIP for minimum 5 years. Only stop if goal achieved or financial emergency.
If you want someone to assist you with your investments, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
Common Mistakes to Avoid
Mistake 1: Buying Regular Plans
Costs you 30-50% returns over 20 years. Always verify "Direct" in fund name[Source article].
Mistake 2: Chasing Last Year's Top Performer
Fund that gave 40% last year might give -10% this year. Past performance ≠ future returns.
Mistake 3: Over-Diversification
Having 15-20 mutual funds = unmanageable, overlapping portfolios. Optimal: 4-6 funds max.
Mistake 4: Stopping SIP During Market Falls
Biggest wealth destroyer. Market crashes = units bought at discount. Continue SIPs ruthlessly.
Mistake 5: Ignoring Tax Implications
Equity funds: LTCG 12.5% above ₹1.25L (held >12 months)
Debt funds: Gains taxed at slab rate (post-April 2023)
ELSS: 80C deduction up to ₹1.5L, 3-year lock-in
Plan investments considering tax efficiency.
Bottom Line: Just Start
The best platform is the one you'll actually use. The best fund is the one you'll stay invested in. The best time to start is today.
Simplest Possible Start:
Open Kuvera or Groww account (10 minutes)
Complete e-KYC (15 minutes)
Start ₹1,000 SIP in Nifty 50 Index Fund Direct (5 minutes)
Increase to ₹5,000-10,000 over next 3 months
Add 1-2 more funds after understanding basics
Total time: 30 minutes. Years of wealth creation: Priceless.
Don't overthink. Don't wait for "right time." Markets reward time in market, not timing the market. Start this week.
If you want someone to assist you with your investments, feel free to contact us. Our team of experts will be happy to help. You can also email us at help@reymanwealth.com
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