December 17, 2017

Empower Yourself With MF Utility Online

This post is primarily for the benefit of two groups of mutual fund investors: a.those who presently do online transactions via fund house websites and b.those who would like to commence doing online transactions.  For those who may not know, MF Utility Online (MFU) is the industry-sponsored transaction website that enables investors to make mutual fund transactions across multiple fund houses.  I regard it as a powerful tool that empowers mutual fund investors.  In this post, I’ll attempt to make my case. 

Before I do so, a couple of things.  Firstly, it would be best to note that, at this point, MFU is a transaction website, and little more.  Over time, it may become a lot more, but for now, that’s all it is.  Secondly, it is one of many websites/ apps that are available to mutual fund investors to do online transactions.  I am not trying to suggest that MFU is necessarily better than the rest.  Each website/ app likely has its own reasons to be considered.  The purpose behind singling out MFU in this post is that I personally see it as a worthy example to illustrate the benefits of transacting via such websites/ apps.  That it is a AMFI-led initiative, and is free, makes it arguably the easiest acceptable choice for someone seeking out a transaction website/ app for the first time.  It is also a good benchmark against which any transaction website/ app should be measured.

These, then, are some reasons for one to choose MFU over/ in addition to individual fund house websites for doing transactions.

One-stop convenience
MFU offers the convenience of buying and selling units across schemes from 28 fund houses (at the time of writing).  You can transact across both regular and direct plans.  You can initiate SIPs, SWPs, and STPs.  For all folios created via MFU, if you need to make changes to your profile, MFU spares you the hassle of having to do so individually, with each fund house.  As for your pre-existing folios with the participating fund houses, these get automatically mapped to your account, enabling you to buy and sell units under those folios.

Efficiency-enhancing features
MFU enables you to execute multiple transactions, across different fund houses, at one go.  In addition, it offers other features that are not available on many fund house websites.  For instance, you can  schedule transactions to be executed on a specific future date, or to be executed regularly at a defined frequency.  You can also save a set of transactions for indefinite future use.  These can be conveniently executed whenever you want to, and as many times as you want to.

Diversification against website downtime
What if you want to log in to a fund house website but it doesn’t allow you to?  In case you find that hard to believe, I can assure you that it has been known to happen.  I have faced this a few times, across at least three different fund houses.  What made matters worse is that even though this was the fault of the respective fund houses, the error messages that popped up, unfairly blamed me for entering a wrong username or password.  As a result, I tried logging in repeatedly, before eventually giving up.  At times such as these, it helps to have access to an alternative transaction portal.  Speaking for myself, ever since I signed up for MFU, I have stopped transacting via fund house websites.

Many fund house websites are not user-friendly
Leave aside the aesthetics, most fund house websites violate basic navigation principles, making it difficult for users to find information.  On top of that, a number of them ruin the transaction experience through pointless clutter and needless, irritating pop-ups.  In contrast, MFU has a clean, user-friendly transaction interface.  It may not be perfect but I consider it to be better than that of almost all the fund house websites that I have seen. 

Steer clear of questionable processes
Recently, I met an investor who wanted to redeem some old mutual fund investments.  Before that, though, he had to first change the bank account into which the money would be transferred.  The reason was that this investment had been made several years ago, and the bank account linked to that had since been closed.  As per the process set forth by the fund house, any request for change in bank account required an investor to present a cancelled cheque of the earlier account, failing which a letter from the bank had to be provided.  The investor didn’t have any cheques of the earlier account, and he was no longer in the same city as the bank.  Instead, on the suggestion of someone, he signed up for online access via MFU by merely offering proof of his current bank account.  He then executed the redemption via MFU, thus bypassing the (shoddy?) process of that fund house.

To get started on MFU, you need to first get a Common Account Number (CAN).  You could click here to know how to go about getting it.  Once you get a CAN, you can apply for online access by sending them an email from your registered email address.  For more information, you could click here.

In case you’d like to explore other mutual fund transaction websites/ apps, I’ve put together a checklist of things to consider in making a choice.

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