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Mutual Funds FAQs

Once you fill in your personal details at https://investment.karvyonline.com/ you will have to go through the following steps to complete the registration process.
Step 1: PAN Validation
Step 2: KYC FATCA
Step 3: Fill in Bank A/C Details
Step 4: Nomination Details
Step 5: Confirm Details
If you are registering your KYC for the first time, you can use e-KYC option. For e-KYC your mobile number should be linked to Aadhaar because you will get an OTP on it. In case you’re KYC has been rejected in the past or it was incomplete for any reason, you will have to complete KYC in person. You can get in touch with us on 1800-425-8282.
NRI staying in the US and Canada are not allowed to invest in Mutual funds through online mode. All others can create an account on our platform and invest online.
No, this is an individual account.
There are no annual charges charged on investments made from the Online Investment account. It is free for all the investors. Mutual fund companies do charge for managing the fund(s), which is also known as expense ratio.
Yes, once you register with your PAN, all your existing investments done through Karvy will be visible on this platform. However, you will not be able to edit/redeem the offline investments through this account.
Yes, you can login to this platform from desktop, laptop, mobile or tab. It is also compatible with most popular browsers.
Yes, it is mandatory to have your name printed on cheque leafi.In case it is not printed, you can upload your bank account statement or passbook front page where details like name, account number and IFSC is printed clearly.
You can invest through our platform via net banking and e-mandate.
No, you can only purchase mutual funds through net banking facility of your bank.
You can start an SIP with as low as Rs. 500 through this account. There is no maximum limit for investment.
No, you can invest only in regular plans of mutual funds through this online investment account.
It means the order has been sent for processing from our side. The units will be reflecting within T+2 days.
Though it takes T+2 days to process the request, NAV on the date of fund realization will be applicable.
URN or Unique Registration Number is generated for every SIP. This would need to be entered during the biller registration process in the bank account which is as follows: - Login to your net banking account - Click on Bills/Biller/Bills and Pay - Register New biller - Select Business category as Mutual Funds - Select the Mutual Fund AMC used for investment - Enter the URN number received in your email and mobile number in the empty text box - Tick "Auto Pay" option and enter an appropriate amount below (this amount will be auto debited each month) - Enter your User ID and transaction password, click on add to complete the process
E-mandate allows you to electronically authorize the debit order to the bank. In short, it helps you to allow the bank online for the debits of your SIP investments. It is very similar to an NACH mandate. It uses an electronic validation instead of a physical signature and is offered directly by individual banks. This facility is available with 41 banks.
This option in available in your account’s ‘my profile’ option.
No, this is a one time process. This process is linked to bank account.
It takes 1 week to register e-OTM.

Investor with low risk appetite have several options to choose among debt funds , one of them is FMPs. FMPs are close ended funds that investors can only invest at the time of the  new fund offer (NFO) and can only exit at maturity. FMPs come with a pre – defined maturity which can range from 3 months to 5 years , and they invest in fixed income securities such as money market instruments, government bonds across the credit spectrum.

 Some of the features of FMps are as follows :-
  1. BUY AND HOLD STRATEGY - LOCKING- in Current YEILDS,

FMPs follow a buy and hold strategy, which help investors lock-in- the prevailing yields in the market. Hence, investor in FMPs benefit more in a high or rising interest rate scenario, as they can capture higher yields compared to a low interest rate environment.

No interest rate risk

Debt mutual funds are primarily exposed to two types of risk-interest rate risk, and credit risk. As bond prices are inversely related to yields, the net asset values of open –ended debt funds are sensitive to interest rate changes, making them volatile. However, investors in FMPs do not face any interest rate risk, as the funds capture the current yields by holding on to the securities until they mature. Investors will earn returns equivalent to the locked-in yields, despite interest rate volatility during the holding period.

FMPs vs FDs – Indexation benefits

FMPs are close ended Mutual Funds, which invests in securities of better credit quality. FMPs offers risk adjusted returns and taxation benefits.

In addition to the benefit of optimizing a high yield scenario, FMPs can potentially generate higher tax- adjusted returns, through the benefit of indexation for holding periods of more than three years, when compared to FDs. Long term capital gains are taxed at 20% after adjusting for indexation, where as the income earned on FDs are taxed at the investors tax slab. Indexation thus can help investors in earning better tax adjusted returns.

Credit risk:

While FMPs are not exposed to interest rate risk, they do face credit risk like all debt funds. Since they invest in debt securities the credit rating spectrum, their returns are susceptible to risks arising from credit defaults or rating downgrades on the securities held in their portfolios. Investors with a low risk appetite can minimize this risk by investing in FMPs that largely invest in top rated AAA bonds, and those with a high risk appetite can invest in FMPs that also take exposure to below AAA rated bonds.

Inflation has undershot RBI’s projections consistently and GDP growth is within range. RBI had a rate cut by 25 basis points. RBI is executing OMO (Open Market Operations) purchase of G-secs, which reduces effective net supply of fresh bonds to the market. It is advisable to invest in shorter maturity products, to have a relatively lower volatility risks. Investors should be careful and invest into those FMPs which invest predominantly into high credit quality and AAA rated securities.

Budget 2019 has reduced the tax burden on taxpayers and has a positive impact on lower and middle income groups. Key highlights like No tax on income upto Rs.5 Lakhs, Hike in standard deduction will help taxpayers earning upto Rs.7.5 lakhs, end up paying zero taxes.

The budget proposals are likely to put greater stress on tax planning. These proposals will encourage tax payers to invest in tax saving instruments.