You need a demat account when you are investing in equities, but is demat account required for mutual fund?
The answer is No. A demat account is not mandatory when you want to invest in mutual funds. It is one of the methods to invest in mutual funds, but there are various other methods to start investing in mutual funds.
If you want to invest in mutual funds and also other instruments like equities, bonds, etc, then you can open a demat account and invest in mutual funds through it. It gives you the accessibility to monitor all your investments easily.
But if not a demat account, then what?
Let us find out!
How to Invest in Mutual Fund Without Demat Account
There are various other ways to invest in mutual funds without a demat account. Some of the ways are as follows.
- You can approach an asset management company and invest in mutual funds directly through that. But in this case, it is essential that you study the past performance and the capabilities of the company so that you make a better decision. Another thing to keep in mind is to invest in the mutual funds of different asset management companies so that you have a diversified portfolio.
- Distributors are another option to invest in mutual funds. There are online as well as offline distributors. They give you the facility to invest in a variety of mutual funds.
Though there are various options to invest in mutual funds, is it better to buy mutual funds through demat account. First of all, it makes sure that your investments are safe and that you can track them whenever you want. It also gives you the advantage of carrying out paperless transactions.
So, a demat account is not required to invest in mutual funds. But it is a preferable method because of added safety.
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