In recent years, digital investment platforms have made it easier than ever to invest in a variety of assets, and PhonePe, one of India’s most popular digital payment apps, is no exception. PhonePe has partnered with leading mutual fund platforms to offer users the ability to invest in mutual funds directly from the app. This makes it incredibly easy to grow your wealth and manage your investments all in one place.
If you’re looking to start investing in mutual funds through PhonePe, this step-by-step guide will walk you through the process, explain the benefits, and help you make informed investment decisions.
What Are Mutual Funds?
A mutual fund is a type of investment vehicle that pools money from various investors to invest in a diversified portfolio of assets such as stocks, bonds, or other securities. Mutual funds are managed by professional fund managers who make investment decisions based on the fund’s objectives.
There are different types of mutual funds, including:
- Equity Funds: Primarily invest in stocks.
- Debt Funds: Invest in government or corporate bonds.
- Hybrid Funds: A combination of equity and debt.
- Index Funds: Track a specific index like NIFTY or Sensex.
- Liquid Funds: Short-term debt instruments for parking surplus funds.
Mutual funds allow small investors to gain exposure to a diversified portfolio of assets, even with a low initial investment amount.
Why Invest in Mutual Funds through PhonePe?
PhonePe makes it easy for users to invest in mutual funds directly from the app. Here’s why you might consider using PhonePe for your mutual fund investments:
- Convenience: You don’t need to visit a financial advisor or fill out complicated forms. The process is digital and easy to follow.
- Small Investment Amounts: You can start investing with as little as ₹500, making it accessible to everyone.
- Track Investments: Monitor your mutual fund investments directly within the app at any time.
- Systematic Investment Plan (SIP): Set up SIPs to invest a fixed amount regularly, a great option for long-term wealth creation.
- No Hidden Fees: PhonePe provides transparency regarding charges, and you don’t have to pay any extra fees for using the platform.
- Security: PhonePe follows high standards of security for financial transactions, giving you peace of mind while investing.
Step-by-Step Guide: How to Use PhonePe for Mutual Fund Investment
Step 1: Download and Set Up PhonePe
If you haven’t already installed PhonePe, you’ll need to download the app from the Google Play Store (for Android users) or Apple App Store (for iOS users).
- Open the app and complete the registration process by linking your mobile number, bank account, and setting up a PIN.
Step 2: Link Your Bank Account
To invest in mutual funds, you need a linked bank account for transactions.
- Go to ‘My Money’ section from the PhonePe home screen.
- Tap on ‘Bank Accounts’, then link your active bank account by following the on-screen instructions.
Step 3: Access the Mutual Fund Section
Once your bank account is linked:
- Open the PhonePe app and tap on the ‘Financial Services’ section on the home screen.
- You’ll find ‘Mutual Funds’ listed among various investment options like Insurance, Gold, and Loans. Tap on ‘Mutual Funds’.
Step 4: Browse Mutual Fund Options
After tapping on ‘Mutual Funds’, you’ll be presented with a list of available mutual fund schemes. You can browse through equity funds, debt funds, or hybrid funds, among others.
- You can filter funds based on your risk tolerance (low, medium, high), investment goals (short-term, long-term), and fund type.
PhonePe partners with AMCs (Asset Management Companies) like ICICI Prudential, HDFC Mutual Fund, and SBI Mutual Fund, giving you access to a variety of top-rated mutual funds.
Step 5: Select a Mutual Fund
When you find a fund that suits your needs, tap on it to view more details, such as:
- Fund performance (historical returns)
- Fund manager and their track record
- Expense ratio (fees the fund charges for management)
- Investment strategy and goals
Make sure to evaluate the risk and reward associated with the fund before proceeding.
Step 6: Choose Investment Type (Lump Sum or SIP)
You can invest in mutual funds either as a lump sum (a one-time investment) or via a Systematic Investment Plan (SIP) (a recurring, smaller monthly investment). Here’s how:
- Lump Sum: Invest a specific amount all at once. Ideal for those with a lump sum of money to invest.
- SIP: Invest a fixed amount every month. Ideal for those who want to invest regularly without worrying about market timing.
Select the investment option that works best for your financial goals.
Step 7: Enter Investment Amount
- For SIP, enter the amount you want to invest monthly. Usually, SIPs can start with as little as ₹500.
- For a lump sum investment, enter the amount you wish to invest in the selected mutual fund.
Step 8: Complete KYC (Know Your Customer) Verification
Before making an investment, you’ll need to complete a KYC (Know Your Customer) process if you haven’t done it already. This involves submitting your Aadhaar number and PAN card details for identity verification.
- Aadhaar-based KYC: If you have already completed Aadhaar KYC on PhonePe, this step will be faster.
- PAN Card Details: You will be required to enter your PAN details as part of the KYC process.
Step 9: Make the Payment
Once your KYC is complete, proceed to make the payment for your mutual fund investment.
- If you selected SIP, you will be required to authorize the recurring payment for the set amount each month.
- For lump sum investments, make the payment for the entire amount using your linked bank account or PhonePe Wallet.
Step 10: Track Your Investment
After your payment is successfully processed, your investment will be confirmed, and you’ll receive a confirmation message. You can then track your mutual fund performance directly through the ‘My Money’ section under ‘Mutual Funds’.
- View your investment portfolio, track returns, and check the performance of your mutual fund investments.
Key Advantages of Using PhonePe for Mutual Fund Investments
- Easy Access: You can start investing in mutual funds right from the PhonePe app without needing any additional accounts or platforms.
- Small Investment Amounts: Whether you’re new to investing or want to make small, regular contributions, PhonePe allows you to invest with just ₹500 in an SIP.
- Diversified Portfolio: PhonePe provides access to a wide range of mutual funds, helping you diversify your investments.
- Transparency: Detailed information about each mutual fund is provided, including past performance, risk level, and expense ratios.
- No Paperwork: The entire process is digital, saving you time and paperwork.
- Tax Benefits: Certain mutual funds, like ELSS (Equity Linked Savings Scheme), offer tax-saving benefits under Section 80C of the Income Tax Act.
Things to Keep in Mind When Investing in Mutual Funds
- Risk: Mutual funds, especially equity funds, come with market risks. Always assess your risk tolerance before investing.
- Long-Term Investment: If you are investing for long-term goals (like retirement), consider holding your investments for 5 years or more to benefit from compounding.
- Monitor Your Investments: Periodically check the performance of your mutual funds and adjust your portfolio if necessary.
Conclusion
Investing in mutual funds through PhonePe is an easy, secure, and convenient way to start building your investment portfolio. With the option to invest through SIP or as a lump sum, PhonePe allows flexibility for all types of investors. Whether you’re a beginner or an experienced investor, PhonePe provides a seamless way to access some of the best mutual funds in the market with no paperwork or complicated procedures.
Before investing, make sure to evaluate your financial goals, risk appetite, and investment horizon. And remember, mutual fund investments grow best when you remain patient and disciplined over the long term.
So, if you’re ready to take the first step towards investing, open the PhonePe app today and begin your journey toward financial growth!