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  • Now, all your mutual fund purchases just an sms away

    Quote by Jayant Pai in The Economic Times, August 23, 2012

       read ( words)

    You have heard about mobile banking. Probably, you do a bit of banking transactions through your humble mobile phone while on the move. Well, here are some more tasks you can conduct through your mobile phone: trading in stocks, commodities, currencies, and so on. Now, you can invest in mutual fund schemes using your mobile phones - through an SMS or using a dedicated application or by calling up on a designated phone number.

    As of now, eight fund houses are offering facilities to either transact or see mutual fund portfolios. Industry observers expect more fund houses to start offering such facilities soon.

    Signing up for it

    If you are a new investor, you will have to fill up the common application form, along with know-your-customer documents and a registration form. After your folio is created and you receive your personal identification number (PIN), you can download the mobile application and buy and sell fund units.

    Existing investors just have to fill the registration form for this facility. If you are transacting through SMS, you have to sign a form that registers a mobile number for all your transactions. To transact by a phone call, you may require a PIN, which is issued by the fund house after receiving an application in the designated form.

    A mobile application is akin to any other application, such as mobile banking application. You need a 'smart phone' to use it. You can typically buy, sell and switch fund units on this platform. While transacting through SMSs you need to send 'code' and amount to a specific number. For example, to invest 25,000, you have to send INV 25000 to a specific number from the mobile phone registered with the fund house. You can buy and sell units using this mode. You can do this using a basic mobile phone, too.

    If you are transacting by calling the fund house, the fund house will verify your credentials and further ask for the PIN before allowing the transactions.


    Investors can effectively transact while on the move and do away with most of the paperwork, though they may not be transacting on web. Investors also get access to a wide bouquet of products.

    "SMS is a better transaction channel in case of products like ultra-short term bond fund, in which investors transact frequently," says Kalpen Parekh, chief executive officer of IDFC AMC. An ultra-short term bond fund is ideal for investors to park their surplus savings, before they allot it to some other investments. However, many people don't invest in them because they find the process a bit taxing. Mobile investing could change that. As investment or redemption request can be submitted quickly on phone, there is no need to wait for the distributors. It is one more channel offering ease of transaction, crucial for execution of self-directed investment decisions of investors," says Jayant Pai, head (marketing), PPFAS Mutual Fund.

    Teething troubles

    There is no additional cost for investing via mobile phone. Though phone calls and mobile applications allow transaction in many schemes, your options to invest via SMS are limited to a couple of schemes. As most 'SMS formats' do not include the scheme name, you can transact only in the scheme that is registered under the folio.

    However, it should change soon as experts are banking big on more evolved version of this platform. If you are doing SMS-based transactions, only one bank account (registered with the fund house) will be used to accept funds for investments and to send redemption proceeds. Similarly, only one mobile number is mapped to one folio. This would make it tough to transact if you have multiple folios with one fund house.

    Also, only a few banks have partnered with mutual fund houses for mobile transactions. For example, IDFC Mutual Fund has tied up with eight banks for its M-transact platform. According to industry players, fund houses are in the process of tying up with more banks.

    So check if your bank is a partner or not. Otherwise, you may have to open a new account and transfer money into it.

    Also, your distributor wont be too keen to offer this facility as some of them believe that mobile transactions may eliminate them in the long term, though all the transactions made by the investors using mobile phones are mapped to the same distributor code (ARN number) mentioned in the common application form filled at the time of creating the portfolio.

    "There is a possibility of investors taking impulsive decisions," says Jayant Pai. "On a bad day in the stock market, one may choose to sell all equity investments on a quick call. He may not get an opportunity to 'cool off' on this platform, which he would get if he transacts through an advisor," says a wealth manager who wishes not to be identified. The other extreme is putting all money in equities just because markets show some green shoots.

    In short, this channel may work for you if you have an investment plan and temperament to stick to it. If you know where and why to invest, this is definitely a facility investors must use," says Abhinav Angirish, managing director,, an online mutual fund distribution entity.

    The original article could be seen here.

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    Sponsor: Parag Parikh Financial Advisory Services Private Limited. [CIN: U67190MH1992PTC068970], Trustee: PPFAS Trustee Company Private Limited. [CIN: U65100MH2011PTC221203], Investment Manager (AMC): PPFAS Asset Management Private Limited. [CIN: U65100MH2011PTC220623]