December 16, 2017

On Selecting A Mutual Fund Transaction Website/ App

I am frequently asked as to which is the best mutual fund transaction website or app.  I have also been asked from time to time, to consider doing a post with a list of these websites/ apps and a comparison of their features.  Frankly, I don’t think that I can do justice to the task of comparing these websites and apps, or to the question of which is the best website or app.  There are far too many websites/ apps out there and far too many factors to examine.  What complicates matters is that a lot of this information can change over time.  However, for the benefit of readers, I have given below a list of some of the things that you might want to check before you make your decision.  If in doubt, or in a hurry, I would suggest starting by signing on to the AMFI sponsored portal, MF Utility, or one of the registrar portals.  Then, over time, you could seek out other websites or apps, as necessary.

These are some of the questions that I would consider asking:

  • Which is the firm behind the portal? (what are the credentials of the firm and under which regulating authority does it operate?)
  • What are the pre-requisites for opening an account?
  • Which are the fund houses that you can transact with? (all the fund houses that you want to transact with, should be available)
  • Can you buy direct plans, or only regular plans? (regular plans are expensive, and should be considered only if the advice and value-added services provided are truly worthwhile)
  • Is the option of joint holding available? (some websites only allow single holding)
  • How many bank accounts can be tagged to the account? (some websites only allow a single bank account to be tagged)
  • What is the kind of advice that will be provided? (financial planning, asset allocation, scheme selection, scheme exit etc.)
  • What information/ reports will be provided? (market reports, scheme-specific reports, portfolio analysis, capital gains/ dividend statements etc.)
  • How will the transaction be routed? (websites either deal directly with fund houses, or route transactions via entities such as BSE, NSE, or MFU.  If not direct, it would help to know the pros and cons of the routing choice.)
  • What are the options available for making payment for a purchase transaction?
  • What are the cut-off times for getting the same day’s NAV?
  • If the purchase transaction depends on realization of money, how long could it take for that to happen?
  • How will complaints/ queries/ disputes be resolved?
  • What is the cost of transacting?
  • What is the cost of maintaining an account?
  • What is the cost of advice (if separate from the above)?