We covered Mutual KYC in the last post. This time we will cover – the process of how to invest in mutual funds in India. If you are making your first Mutual Fund Purchase this post will be beneficial for you. MF Investing is a process with documentation like KYC & set of other documents that need to be deposited with the application form. Read on for complete details.

Mutual Funds documentation consist of 2 parts – First is the KYC (Last Post) or Know Your Customer & second is Documents to be attached with the Application while making your first time purchase.

How to Invest in Mutual Funds – Documents Required

As mentioned KYC can simultaneously be done with the first application. In fact, this is the most preferred manner by the MF industry. If you are already KYC compliant just mention PAN and tick “KYC Registered”.

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With KYC MFs also need certain documents with the application form. As per your category, these are:

PAN: copy required for all category of investors.

KYC: If new, KYC form & documents as mentioned above. If KYC is done just tick KYC registered in the MF form.

Bank Mandate: Normally one invest through his own cheque. This serves as Bank Proof. If you are investing through RTGS or online payment, you need to attach bank cheque (canceled) or bank statement (latest with account name & number)

FATCA: It stands for Foreign Account Tax Compliance Act requires foreign banks and certain foreign companies with substantial U.S. owners to report to the IRS (Internal Revenue Service) information about their U.S. account holders or owners.

It is a new piece of legislation to help counter tax evasion in the US.
The goal is to prevent U.S. citizens from hiding their income overseas.
FATCA allows the IRS to reach around the world and track down money that is taxable to U.S. citizens.

You will love to read this too Qualifying Recognized Overseas Pension Scheme (QROPS)

CRS: CRS is commonly known as the Common Reporting Standard (CRS).

NRIs may need to submit some additional documents based on country of residency.

The Organization of Economic Development (OECD) along with G-20 countries, on similar lines as FATCA, released a Standard for Automatic Exchange of Financial Account Information in Tax Matters”. The G20 has called on all countries to adopt the CRS. In principle, there are no restrictions. CRS sets out a standard basis for automatic tax information exchange between member countries through respective bilateral tax treaties.

FATCA & CRS are applicable if the investor has a nationality other than India. They need to fill additional forms or information.

UBO: It stands for Ultimate Beneficiary Ownership. This is an additional form for Non-individual Investors. Beneficial Owners refers to the natural person(s) who ultimately owns or controls a customer and/or the person on whose behalf a transaction is being conducted.

How to invest in Mutual Funds – Folio Number

Once the process is complete, a folio number is issued to the investor. Now in future, you do not require to furnish any documents while transacting in this folio.

You may like to Read – MF Taxations-Some More Details ASBA Form 16

How to Invest in Mutual Funds Online

MFs transaction can now also be made through online platforms like BSE Star MF, MFU or NSE-NMF. But these also first register a client first using the documents mentioned above.

Hope you liked this lengthy but important post on MF KYC, MF Documentation & How to invest in mutual funds for the first time.

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After HOW the next Question will be WHERE to invest. We already have written so much about it. Just a hint – Follow the Financial Planning route.

Share your views and do ask in case you are stuck. We will be happy to help you.