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Home / Mutual Funds / News /  HDFC, Kotak push investment platforms. Should you choose HDFC Money or Kotak Cherry?
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HDFC Securities, on 24 May, launched HDFC Money, a ‘goal planning’ platform that will suggest a portfolio of mutual funds to you based on your time horizon, investment amount and risk appetite. The platform will also connect you to tax filing and Will creation services. 

This was followed by the Kotak Mahindra Group launching its ‘super app’ Kotak Cherry today. The app had been in a soft-launch phase for a few months and has now been opened to the general public.

Unlike HDFC Money which will offer commission-based regular plans (acting as a mutual fund distributor), Kotak Cherry will offer direct mutual funds. The latter has adopted more of a marketplace model, enabling users to also buy stocks, bonds, fixed deposits, NPS and at a later stage, baskets of stocks and international investing. The app currently requires you to have a Kotak Securities account for stocks and bonds, but it will later be ‘open architecture’ allowing those with other brokerages to also invest. A Kotak Mahindra Bank account is not needed. For HDFC Money there is no need for a HDFC Securities demat account.

With regard to fixed deposits, Kotak Cherry currently offers Kotak Mahindra’s own FDs but will later also offer corporate FDs. The app also has mutual fund baskets created by asset management companies (AMCs).

Kotak Cherry has been launched by Kotak Investment Advisors Ltd (KIAL) which is a Sebi registered investment advisor (RIA). Kotak Cherry will eventually cater to both do-it-yourself or DIY customers and advisory customers. At present, the platform is only open to DIY customers. This would allow existing mutual fund distribution customers of Kotak Mahindra Bank to also use Kotak Cherry. The distinction is important because Sebi rules do not allow RIAs to offer distribution and advisory services to the same client.

What investors should note

Traditionally banks have followed a relationship-manager (RM) driven commission-based distribution model. There have been instances of RMs pushing products that are not suited for clients, in order to earn higher commission. While several banks enable investing on their apps, the trend toward dedicated investing apps is new. Before you invest, understand how the bank is earning its money. In the case of HDFC Money, it is through distributor commissions. In the case of Kotak Cherry, the model is not clear at present. However, it may also be through commissions on products like fixed deposits or bonds in the future, even if direct mutual funds are offered. There is also a host of non-bank owned apps in this space including Kuvera, Groww and Paytm Money, which are free for many products (such as commission-less direct mutual funds). You should take all of these into account as well while making a choice of platform.

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