The best gift that you can give your child is probably the time you spend with her. And one way to get more time is to use the Internet to make investments. Online platforms also help in speedier and more efficient decision making, and better money management which means freeing up time and reducing paperwork.
Many financial transactions can be done online, be it investing for your child’s future or managing your bank accounts, paying insurance policy premiums or even school fee. In some financial products, the entire process is online, while in others, some paperwork may require your physical presence. Here is how you can invest online in different avenues.
To invest in direct equity (shares), you need to have a demat and trading account. While opening a demat account is an offline process, once it’s done, you can transact online. You can link it with your bank account from which you can transfer money into the demat account. Till the time you don’t buy or invest in shares, the funds remain in the demat account. If you want to withdraw your money from the demat account, you can do so online, and the money will get transferred to the linked bank account. There are brokerages and banks (through subsidiaries) that provide online demat and trading accounts.
To invest in mutual funds (MFs) you need to first complete the know-your-customer (KYC) process. It is a one-time, mandatory exercise. Till recently, KYC compliance process for investing in MFs was entirely offline, but now some fund houses have started accepting e-KYC. The Securities and Exchange Board of India (Sebi) recently allowed Aadhaar-based e-KYC service offered by Unique Identification Authority of India for KYC verification. You can also apply for e-KYC through websites of service providers, such as Computer Age Management Services Pvt. Ltd (CAMS) and Karvy Computershare Pvt. Ltd. You can also apply for e-KYC through fund houses that are associated with such service providers.
You need to put in your Aadhaar, Permanent Account Number (PAN), and mobile phone number for validation with the Aadhaar database. On successful authentication through one-time password (OTP), your KYC compliance is done. After this, you can invest in MFs online.
If you know the fund you want to invest in, you can do so directly through the fund house’s website, or a service provider or intermediaries. If you do not know which fund to choose, you could take the help of Mint50, Mint’s curated list of 50 schemes. You can also take the help of financial advisers and other intermediaries. You can invest a lump sum or start a systematic investment plan (SIP). Switching between funds and redemptions can be done online.
Online service providers also offer other services, such as advisory and portfolio management. “Besides investing in mutual funds, we also offer goal-oriented portfolio management,” said Srikanth Meenakshi, founder and director, FundsIndia.com, an online financial services provider.
If you are keen on investing in gold, gold exchange-traded funds (ETFs) are an option. This is a type of MF that invests in physical gold and the units of the scheme are listed on stock exchanges. You can buy gold ETFs from the stock exchange using a demat and trading account. The same account that you use for equities can be used for gold ETFs as well and you can buy and sell units online.
You can invest online in fixed deposits (FD) through Internet banking, provided you have an account with the particular bank where you want to open the FD. For online access, apply for an online account. The bank will send you the Internet personal identification number (PIN), with which you can login online and do the required transaction.
However, for investing in corporate FDs, you need to visit a financial intermediary’s website. Fundsindia.com, HDFC Securities and Bajaj Finance Ltd are some examples of intermediaries that provide the option to invest in corporate FDs online. But before investing, make sure you are aware of the associated risks.
Public Provident Fund
The process of opening a Public Provident Fund (PPF) account is done offline, but the subsequent investing can be done online. You need to submit the application form either to a bank or post office. For example, if you have Net banking facility with ICICI Bank, you can login to your account and fill up the PPF form. You need to then take a print of the form, affix your photograph, sign on the form, and submit to the bank’s branch. Once the account is open, you can invest in it through Net banking and track it online.
Mint Money take
The Internet does make it easy to manage your funds and invest in different avenues, however, before investing, make sure you have a clear idea of why you are investing in a particular financial instrument. Usually, there is no difference in terms and conditions of offline and online investments, but before checking the ‘I agree’ box, do read the terms carefully.
Online facilities can also expose you to frauds so don’t share information such as user ID, password and OTP with anyone. And remember, to transact only through websites that are authentic.