Paytm enters mutual funds market; here’s all you need to know
MUTUAL FUND APP
Paytm Money Ltd, wholly owned subsidiary of One97 Communications Ltd, which owns Paytm, has launched a mutual fund app on Android and IOS platforms. As part of this, the company has tied up with 25 asset management companies and will offer direct plans.
Through the app, investors will now be able to buy and sell mutual funds. The company is targeting first-time mutual fund investors from tier-2 and tier-3 towns who are able to invest ₹500₹1,000 per month, said Pravin Jadhav, whole-time director of Paytm Money. Through the app, you can start investing in mutual funds with a minimum amount of ₹ 100.
ADVICE ON THE CARD
The company has partnered with Morningstar, Crisil and Value Research for providing ratings. However, it is not relying on these companies for advisory.
“We are setting up our own advisory team to evaluate the entire set of mutual funds in the market and advise the customer depending on the investor risk. We have introduced detailed risk profiling on the platform. When customers come on-board, we recommend that every investor know their risk appetite,” said Jadhav. “You will have to provide details such as income, liabilities and dependents. The company will provide details about the mutual fund scheme. However, it is currently not available.”
THE PROCESS
Currently, it is being offered only to customers who registered for early access. The company will soon start providing access to a limited number of customers. To start investing in mutual funds through the app, you will have to complete your know-your-customer (KYC), if you are a first-time mutual fund investor. For existing mutual fund investors, you have to enter your permanent account number (PAN) which will provide all your KYC details. If you are not an existing customer, you have to do a full KYC including your name, PAN details, proof of address and declaration. Paytm Money Ltd has a digital account opening form, hence, everything happens online, said Jadhav.
SHOULD YOU OPT FOR IT?
There are multiple companies that offer direct mutual funds on their platforms. Compared to regular mutual funds, a direct plan is cheaper as the expense ratio is lower in direct plans.
Direct plans work for those who are able to understand mutual funds and pick the schemes accordingly. If you are not able to select the right mutual fund for you, you should take the help of a financial advisor or a financial planner before making the right choice.
Experts say if you want to opt for direct plans but you are not sure about which fund to pick, you should seek advice from a good distributor or a financial advisor.