Is it safe to invest in mutual funds online?

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Mutual funds are one of the most common investing methods for Indians with about 4.91 crore subscribers in systematic investment plans alone, according to 2021 year end data from the Association of Mutual Funds in India (AMFI). Thanks to continuous efforts by AMFI through marketing campaigns studded with stars, more and more people are now aware of mutual fund investments and their benefits. 

But for a country that is still breaking the ice on market investments, the fact that investing in mf online is still seen with a doubt attached to it. But are there genuine reasons to worry when you invest in mf online? Let’s take a deeper look at mutual fund investments and see how safe it is to invest in them online.

The popularity of mutual funds

Mutual funds plans are popular for a variety of benefits that they offer to different types of investors. Investing directly in stocks is a time and energy-consuming affair and it requires constant monitoring and intervention. Many Indians, whose favourite investment is still gold and other precious metals, could find this too demanding and that is where a mutual fund can come in handy. You just need to choose a fund based on your investment horizon and it will do the magic for you on its own. Yes, although not regular, monitoring is required to see how well your fund is performing and how it is matching with your investment ideology, goals and risk appetite but it tends to demand a lot less than investing in stocks directly.

Plus, mutual funds are managed by expert fund managers. This makes sure your money is in safe hands. Also, mutual funds in India tend to be much less volatile than investing in stocks directly. All these factors make mutual funds a favourite option for many.

How safe is investing in mutual funds online?

The process is completely safe as long as you avoid scams. All major brokers and asset management companies (AMCs) now provide mutual fund services online and many investors even prefer it because of how hassle-free the whole process is. But there are certain things that you should make sure of so that you can avoid scams. These include –

  • Checking the authenticity of the website – As the investing technology improves, scammers’ technology sees improvements too. This can make you stumble upon a fake website, which could look exactly like the original website. Here, to make sure you are on the right website, always be thorough with your research. The Internet can tell you what the original company website URL is, and this can help you make sure you are on the right page.
  • Pay attention to the payment method – Authentic websites will always have an authentic-looking payment method. This page will mostly accept all cards and UPI IDs. But if the payment is routed to a name other than the company name or if there is a UPI ID given when you have to send the money, chances are, you are on a scam website.
  • Stick to the trusted ones – Depending on trusted brokers and AMCs is one way to make sure you are not duped. Money is a sensitive matter and if these companies are still in business, they must be doing something right.

Conclusion 

Investing in mutual funds online is as safe as it gets as long as you avoid spam by following the above steps. Go online and get invested today!