#7 Best platforms to invest in Mutual Funds

- May 14, 2024

There is a lot of clutter on which app is the best to invest in MFs. Lets compare the top tier ways to invest in MFs in non-demat form.



Perosnally, I am against holding MF units in demat form, since it gives lesser flexibility in terms of systematic withdrawal and transfer facilities.

The 3 top tier ways

  • Directly thorugh AMCs
  • Through RTAs
  • Through MF Utility

The rest all 3rd party apps are based on a SaaS (Software as a Service) with RTAs/AMCs, hence I consider them second tier in their effectiveness in giving best access to your portfolio on a whole.

The major advantage of having an account handy with the top tier is that even if you lose access to the 3rd party distributor app, you can still redeem units directly via any of the three means here.

1. Through AMCs

This is kind of the most primitve way, directly go the website of the Mutual fund house that you want to invest in, complete one time KYC if not done before and start investing.

Pros:

  • Direct access to AMCs services

Cons:

  • Need to maintain mutiple accounts to invest in funds by multiple AMCs
  • Not having a single place to track and maintain full portfolio

2. Through RTAs

What is RTA?
Registrar and Transfer Agent does the book keeping for AMCs. They maintain KYC records, units management/transfer and reduce compliance burden for the AMCs.

There are two major RTAs in the MF industry, CAMS and KFintech. Mutual Fund houses chose one of them as their RTA.

Few fund houses serviced by CAMS: ICIC Pru MF, HDFC MF, SBI MF
Few fund houses serviced by KFintech: Axis MF, Edelweiss MF, UTI MF

You can register yourself on the RTA websites and start investing. Since RTAs are the ones responsible for KYC, you have direct access to non financial transactions like bank details update, nominee update.

Also NACH mandate created at RTA can be used for investing accross all MFs serviced by that RTA.

Pros:

  • Access to a pool of AMCs with one account
  • Signle e-mandate can be used for SIP accross multiple funds under one RTA
  • Direct access to non financial transactions

Cons:

  • Still need two accounts to invest in funds servided by different RTAs
  • Not having a single place to track and maintain full portfolio

In the recent years, CAMS and KFintech have collaboated and come up with a new platform MF Central, which can be used to invest in MFs serviced by both the RTAs. It gives first hand access to both financial and non financial transactions, good for inevstors starting a new folio through the MF Central platform.

Links:

3. Through MF Utility

According to AMFI website, MF Utility is a technology based shared service platform for MF transactions promoted by the mutual fund industry in respect participating mutual funds.

MF Utility has come up with the concept of CAN (Common Account Number). CAN is a single reference for all folio numbers across fund houses.
All folio numbers which you have across fund houses are mapped to a single CAN, which gives a ready reference number all investments.

MFU vs MF Central
MF Utility has been there for quite sometime now, where as MF Central is a more recent collaboration.
Since MFU promoted by AMFI, even in future if a new RTA emerges, MF Utility will hold firm.
While investing through RTAs, PAN is the identity for your folios, whereas CAN becomes the identity in MF Utility.

MF Utility is my personal favourite since I saw it very powerful in bank account details updation and has strong industry backing.

Pros:

  • Access to all AMCs in one place
  • Single mandate can be used for SIP in any fund
  • One place to track all investments

Cons:

  • Primitive UI
  • One extra layer of payment aggreation vs RTA based

Links: