If you have never invested in a mutual fund (MF) and you want to put the first sum of money into it, there are certain things you need to deal with.

Basic portfolio

Take a look at your existing investment portfolio and try to plug the essential gaps that a MF cannot fill. Do you have a Public Welfare Fund account? Possibly the best risk-free rate of return instrument, comes with a lock of 15 years. You can obtain a deduction benefit from section 80C income tax up to a maximum investment of Rs.1.5 lakh to year. Get adequate medical insurance and a term life insurance plan if you have dependents. Many investors who have not yet invested in Mutual Fund often have unit-linked insurance plans that they do not need. Now, there is no lock-in and delivery charge if withdraw after holding the policy for five years. Check the performance of your unit-linked insurance plan and make a decision if you want to withdraw and reinvest the proceeds in an mutual fund scheme.


Unless you are well versed in mutula fund and you are comfortable deciphering schemes, you need a dealer or financial advisor to help you choose the right product. If you need someone to do the physical task of investing with minimal advice, then opt for a dealer. Generally, a dealer does not charge a fee,  if it does, it is a fixed charge of Rs.150. Your fund house will deduct this amount from your initial investment and pay you back.



However, if you want someone to make a holistic financial plan-account your inputs and outputs, restructure existing finances, and plan future goals in detail-you require a financial planner or a registered investment adviser. Services have a fee. There are also many online portals that allow you to invest in mutual funds. If you have knowledge of the Internet and do not need many advices on what scheme to buy or sell, then these are Useful.


A permanent account number card (PAN) is a must. You also need to do KYC registration. If you are investing in a Mutual Fund for the first time and you are doing it directly with a fund house, you will need to complete the KYC. If you turn to an advisor or dealer, she will make your KYC. If your name has changed, make sure the same is reflected on the PAN card. Women who invest in mutualfund for the first time after marriage face problems because their PAN card does not have the new details. The documents must bear the same name in which you invest.


This is a convenient, specially for direct investors. Netbanking will allow you to invest online after making the first investment. Otherwise, you must submit physical applications all the time.