Before making any mutual fund investment, the investor has to fill a form which clearly indicates his personal details such as name, address, number of units applied for and any other form of information which is required. Other details such as bank account number are also required so that there is no fraudulent encashment of any cheque/draft which has been issued by the MF at a future date. Investors can either give physical forms (paper forms) for their financial and non-financial transactions directly to CAMS; for those MFs which are serviced by CAMS.
There are numerous forms for MF transactions such as redemption forms, nomination form, STP form, SIP application form, declaration form, KYC form, etc.
An investor needs to firstly be compliant with the KYC (know your customer) norms before investing in MFs. After that he can then shortlist the MFs in which he/she would like to invest in. Once, this is done; the investor has to fill in a MF form with a supporting cheque. This particular form will be submitted to the respective Mutual fund house or at CAMS/Karvy centres. Once the form is processed and the cheque encashed, a statement will be sent to your email address or posted to your house.
Investors have the option to do this investment option, either by themselves and depositing the forms to the respective MF houses (DIRECT), or making use of the services of a financial advisor/distributor.
Mutual funds can be purchased either offline or online. Online purchases have three options where the investor can purchases MFs from online stock brokerage websites, online mutual fund distributors and a MF’s website.
To redeem means to buy back. It refers to the purchasing back of something that was previously sold. In order to redeem your MFs or buy them back, there is an easy method by which you can do so. All you have to do is fill an online or paper mutual fund redemption form which may be used for all MFs. CAMS acts as the Registrar and Transfer Agent. The form is easily available from the MFs AMC office. The mutual fund redemption form is very easy to fill; you only need to fill in details such as your name, folio number and the number of units you want to redeem. After this is given to the CAMS processing assistant your form will be put up for request.
SIP or Systematic Investment Plan is an investment mode (i.e. a means to invest in a MF) by which you can invest in MFs through period and small installments. It enables investors to save their money regularly. Part of applying for SIP is filling in a SIP Enrolment Form as well as an application form. This form usually requires details such as folio number, frequency of SIP (monthly or quarterly), enrolment period (how long you want to remain invested) and mode of payment (cheque or auto debit facility).