MF Utility – Online platform for Mutual Fund Investments

MF Utility_Online platform for Mutual Fund

SEBI (Securities Exchange Board of India) has launched the much awaited MF Utility (MFU) on 21st Jan, 2015. Mutual Fund Utility is an AMFI (Association of Mutual Funds of India) initiated online mutual fund investment platform.

Before knowing more about MF Utility Online facility, let us understand different ways of investing in Mutual Funds and ‘Direct’ Vs ‘Regular’ plans of  mutual fund schemes.

What are the different ways of investing in Mutual Funds?

How to invest in mutual funds? If you are new to mutual fund investments and want to start investing, you need to know the various ways of investing in MFs.

Currently there are many ways through which you can invest in Mutual Funds (MFs), these are;

  • Individual agents or Investment Advisors
  • Banks
  • CAMS / Karvy
  • Demat Accounts (Ex – ICICI Direct)
  • Online Distributor Platforms (Ex – Fundsindia.com)
  • Mutual Fund house Websites

Regular Vs Direct Mutual Fund Plans

If you have been investing in mutual funds, you might have observed that there are two types of plans of the same MF scheme are available now. One is a ‘Regular Plan’ and second one is ‘Direct’ Plan.

Around two years back SEBI introduced ‘Direct’ Plans. Now, AMCs (Asset Management Companies) provide you with these two options for each and every mutual fund scheme. (Some AMCs offer Direct plans only )

The main difference between Regular plans and direct plans is the Expense Ratio. What is Expense ratio? Expense ratio shows the amount that mutual funds charge for managing the investors’ money. A Regular Mutual fund scheme has higher expense ratio when compared to a Direct MF plan. The main reason for this is, there is no intermediary involved between you and AMC (Asset Management Company).

For exampleThe expense ratio of HDFC Top 200 Fund Direct Plan is 1.65% and the expense ratio of HDFC Top 200 Regular plan is 2.23%.

You can observe that the NAVs (Net Asset Values) of Mutual Fund Direct Plans are slightly higher than the NAVs of Regular plans. So, over a long investment period you can certainly benefit from investing in Direct MF schemes.

For exampleThe NAV of HDFC Top 200 Fund Direct Plan (Growth) is Rs 359.72(as on 20-Feb-2015) and the NAV of HDFC Top 200 Regular plan is Rs 355.32 .

The difference between accumulated corpus of a Direct Plan and a Regular Standard Plan will be significant if your time horizon is say more than 15 years. (Kindly note that investment portfolios of both regular and direct plans of a scheme are same)

How to invest in Mutual Fund Direct Plans?

If you are manually filling MF investment form (application form), you have to select the option called ‘DIRECT.’ You can also invest in Direct plans online (some MF houses provide this facility) by visiting the respective AMC websites.

The main drawback of this is, if you have to invest in 5 different mutual fund schemes offered by multiple mutual fund houses, you have to either visit respective AMC offices (offline) or visit their websites. If there is a change in your KYC details (like change of address or bank account number etc.,) then you need to inform all the AMCs. So, investing in Direct Plans is somewhat a tedious job as of today.

This is set to change…

What is MF Utility (MFU)?

MF Utility is a shared infrastructure of all AMCs in India to provide online investment facility to mutual fund investors. MFU is sponsored and funded by the mutual fund houses.

The Association of Mutual Funds of India’s (AMFI) MF Utility is a single-window online platform for investment in MF schemes across fund houses. It will work as a web-based transaction aggregator.

MF Utility (MFU) is a browser-based application that connects investors to registrars and transfer agent (RTA), bank, fund house, payment gateway KYC registration agencies (KRAs).

Investors can invest in Direct Plans and Regular Plans through MF utility. This platform will definitely help investors of Direct MF Schemes. The MF Utility portal currently has 25 AMCs which have signed up with MF Utility. Distributors and Investors can register with Mutual Fund Utility.

How to Register with Mutual Fund Utility?

To access MF Utility, you need to get CAN (Common Account Number) activated. The subscription to MF Utility is free of cost. Download the CAN registration form and submit the completed form at MF Utility POS (List of MFU Points of Service). This is a one-time procedure.

If you are not KYC compliant then MF Utilties India will facilitate the KYC registration for investors along with the creation of CAN. (Download KYC registration forms)

As of now, the online transaction facility is not yet activated. The investors may have to wait for few more months to start investing in Direct Plans online. But, the registrations are open and you can go ahead and register yourself as an ‘investor’ with MFU.

Important points, FAQs & Benefits of MF Utility online facility :

  • Can I Invest in all Mutual Fund Direct Plans? – As of now, 25 AMCs are participating in MF Utilitiy platform. You can invest in all the schemes offered by these mutual fund houses. You can choose to invest either in regular or direct plans. Participating AMCs on MF Utility platform
  • You can submit Common Transaction Form to transact in multiple schemes at a time, across Mutual Funds.
  • Can I transfer my existing Mutual Funds to MFU? – Once your CAN is activated, all your existing Mutual fund schemes (Direct / Regular plans) of the participating AMCs will be mapped to your CAN account. You can view the details of your MF investments at one place. You can switch from Regular plan of XYZ Mutual Fund Company to Direct plan of same XYZ mutual Fund company. But switches between two different mutual fund houses are not allowed. (Kindly note that MF switch may attract exit load and Capital gains taxes. You can switch equity funds’ units which are more than one year old, to avoid Capital gains tax)
  • Can I view consolidated statement of all my investments? –  Consolidated view of investments across the industry using your CAN is possible.
  • Will I get alerts or reminders? – Alerts, triggers and reminders for transactions, SIP expiry etc. will be provided.
  • Centralized complaint management and tracking system to login complaints across the industry is provided.
  • Investor can submit changes to Bank Mandate and other details in CAN to MFU POS, and such requests will be appropriately processed in MFU and will be updated in all related folios. Thus change of CAN level details, such as Bank Mandate, Nominees, etc., submitted through MFU will reflect in all mapped folios with different AMCs and there is no need for submission of such requests separately with different AMCs.
  • CAN will facilitate registration of one debit Bank Mandate for multiple SIP registrations using a Common Transaction Form (CTF) in schemes across Mutual Funds participating in MFU.
  • MFU enrollment is free for both distributors and investors. No charges are applicable.
  • How to transact through MF Utility? – Online transactions facility is not yet enabled. So, as of now you can submit a physical transaction form (from 4th March, 2015) at a MF POS (or) through a distributor who is registered with MF Utilities India Pvt Ltd (MFUI). Once the online facility is made available then you can execute all your MF transactions paperless (online).
  • 24/7 online access across mutual funds to access NAV and MF Scheme related information.

So, MF Utility is a centralized mutual fund distribution platform, which will facilitate transactions by customers, distributors and financial advisers in schemes offered by various fund houses on a unified platform. This initiative will help development of the MF industry in smaller towns, besides providing convenience and efficiency to all stakeholders.

( Image courtesy of Stuart Miles at FreeDigitalPhotos.net ) (You may like reading my article onTop 15 Best Equity Mutual Funds.”)

About The Author

  • siva says:

    Hi Sreekanth,

    How are you doing ? it is very long time . i was connected with you around 2017. i have question about MF Utility portal , looks like it is moved to another flatform. do you have any details about new flatform? i want to invest some funds to mutual funds direct schemes. let me know options on this . Thanks

  • Prafulla says:

    Hi Sree,

    By reading this article, i cam to know a lot of info regarding investments in Direct plan. As of now i was investing in regular. Thanks for the info.

    can u please let me know how much it will be charged if i flip my plan from regular to Direct plan?

    waiting for your response.

    Regards
    Prafulla

  • nishith sohani says:

    Hi Shreekanth,

    My MF Adviser has given 35-40 MF in my portfolio I want to know how i should get it converted in Direct MF.

    What will be the implication of such movement.Can you please guide.

    Nishith

  • ASHOK says:

    Dear Sir
    Thank you for such a quality post..keep it up. I am.an nri in middle east and would like to seek your advices on SIP thru direct interaction with yourself. May I request your direct contact numbers pls
    Ashok Mehta ashokpme*** @gmail.com; Phone +973 399643**

  • Ruchir Rai says:

    Hi Sreekanth,
    Just read your article. I must appreciate its very informative and explained in very simple language.
    Thanks.

    I have a question,
    I am clear that if I get my CAN activated all my funds will be mapped with it.
    Will my existing agent get to know of this activity? (as my funds invested through him will also get mapped).

  • Naman Gupta says:

    Dear Sree,
    The content posted is quite informative. Loved the style of answering basic questions of investors.
    Besides, it is long enough to cover the entire context and short enough to keep it interesting. Keep up the good work!
    Thanks
    Naman Gupta

  • Amit says:

    Dear Sree,

    I am impressed with the content that you have posted. Though there are many websites on Mf investing but yours is very practical and addresses the practical issues/queries/dilemma once faces while investing in MF.

    Keep up the good work I have bookmarked your page.

    regards,
    amit

    • Sreekanth Reddy says:

      Thank you so much dear Amit for your kind and encouraging words.
      Keep visiting and do share the articles with your friends 🙂

  • Rajesh says:

    Hi Sree,

    Can we apply for Direct plans from Fundsindia.com or are only Regular plans being provided by Fundsindia.com.

    From what I have understood, we can apply for Direct plans from MF Utility, CAMS or Karvy online facility. Kindly confirm if this understanding of mine in this regard is correct.

    Rgds

    • Dear Rajesh,
      Fundsindia is a distribution platform and they make money through the commissions paid by the fundhouses (AMCs).
      So, they do not offer Direct plans of MF schemes.
      Your understanding is correct.

  • Srikanth says:

    Hi Sreekanth,

    Firstly, I would like to thank you for this Blog.

    I am new to MF and would like to start investing from now. I would like to start Direct MF through MF Utility.

    As of today,
    1. Can you please tell me whether the online transaction facility is activated or not.

    2. In general How long does it take to get the MF Utility login activation ( for both CAN & KYC activation).

    Thanks once again. 🙂
    Srikanth.

  • Rahul G Menon says:

    Do MF Agents get any commission if customer invest through MF Utility

    • Dear Rahul ..If one opts for Direct plans then no commissions are paid out. But if the applications are routed through distributors for Regular plans then commissions are paid by the AMCs.

  • Ankur says:

    hi I I invest through cams … so here cams cut any commission or it will take commission from NAV.. means I am not understant.. how cams work… I want to invest without any broker/Agent/ any type commission on my Investment and.

    So what is the difference between … like I directly do to HDFC MF office and register there or I go through cams what is the difference here?

    ex :- if I invest 5000 through HDFC MF Direct for 1 year with 10% return so NAV = 5500
    if i invest 5000 through Cams Direct for 1 yesr with 10% return so NAV = ? (what is the ammunt)

  • PRADIP says:

    Is there any option in ICICIDIRECT TO INVEST IN MF through DIRECT PLAN not in Regular Plan?

  • Amit Gupta says:

    I have following SIP’s running

    (a) Franklin Prima Fund – 5000 p/m
    (b) Brila MIP 25 Growth -5000p/m
    (c) ICICI Value Discovery Growth -2500p/m
    (d) Mirae Asset India Opportunity -2500 p/m
    (e) Axis Equity-ELSS – 1lac lump sump done

    I am planning to invest in Tata Balanced Fund for Rs.10000 p/m as a SIP in direct fund. Also I have lump sump of Rs.5lac to be invested. Can you advise where to invest for vision of 3 years for lump sump.

    • Dear Amit ..Listed funds are good ones (assuming these are for long-term goals).
      For 3 year goal – You may consider Birla MIP fund itself. (If you can afford to take risk then you can consider both MIP + and a balanced fund (smaller allocation).

  • Vishal says:

    Dear Mr. Reddy,

    Very usefule and knowledgable article.
    I have 1 query. I am investing in MF through HDFC trading portal. I have invested in MF regular plans last year. Now I want to create SIP for new MF plans. Can I invest in MF direct plans through HDFC trading portal with the same benefits as you mentioned in above article?
    Will you suggest me some funds for SIP Rs 5,000 per month for next 12- 15 years. Objective is good returns for long term horizon.
    Awaiting your reply

  • Naveen Muthu Vishnu K says:

    Hi

    is it possible to convert my fund from NSE to RTA ??

  • GEETABALI S SHIRKOLI says:

    Hi sreenath
    Your articles are very good. kindly suggest every month 50000 investment. where and how to do.

  • Ramesh Babu Y says:

    Dear srikanth
    The information given by you is very clear and useful.
    You know the bank interest rates are slashed for past 2 years . people like me seiner citizens and retired are living on interest only. We are under confusion where to go for better returns with moderate risk. will you pl advice.
    Ramesh babu Y

  • chiranjib chattopadhyay says:

    Hello, If you can please help with the following –

    a) Once i am enrolled, can i transact online ?
    b) Now i invest directly through portals of various Fund houses which is little inconvenient. Does this portal help me investing in schemes of all major fund houses using a single log in ? And does that attract any extra charge ?
    c) all my current holdings will be transferred / linked to CAN which can be viewed through this portal ?

    Thanks for help

    • Dear chiranjib,
      1 – Yes.
      2 – Yes. No charges.
      3 – MF Utility (MFU) will not migrate the existing investments of the investors. However, upon creation of a Common Account Number (CAN), MFU will map the existing folios of the investor/s across Mutual Funds, to the CAN, based on the PAN, holding pattern and other parameters.
      For more FAQs on MFU, click here..

  • Harsh says:

    Dear Sreekanth,

    Please help here:
    I want to invest in MFs.I have opened a demat account and trading a/c with sharekhan. But i am yet to invest in MFs. I want to take the Direct Plans of MFs. Hence apart from getting my self registered with MFU what further needs to be done. Should i close my demat and trading a/c with sharekhan as later on it would incur fees?

    And other question is if MFU hasn’t started online transaction facility yet then how am i going to start investing in Direct plans of MFs. Do i have to wait till that is done?

  • Ishan says:

    I have purchased mutual funds through my Demat Account which has two different MF Channel Codes i.e. NSE & RTA.

    My question is as below :
    1. What would be difference between NSE / RTA?
    2. Does RTA means I am purchasing direct plan of Mutual Fund house?

    Consulted Demat Account Helpline but still not getting clear idea. If you can explain in detail..

    Thanks.

  • Dev Arora says:

    Dear Sir,
    I want to buy 9 SIP of Rs. 1000 each for 20 years. Please guide me how i should move further to buy Direct plan or how to start it online, so that my cost will be less and i get higher returns. Kindly suggest me a platform from where i can buy different type of SIP from different companies and I can view all of them with a single login.
    Thanks in Advance

  • Gautam subudhi says:

    Hi Srikant, After introduction of MF utility, what are business proposition or viability of online portals like fun*********mart or myfirst*****.com?
    In other words what, how these online MF portals will survive? as compared to online MF, what MF utility offers additionally? please help understanding.

    • Dear Gautam,
      If MFUtility services are marketed well, it may surely take way business of some of the top online portals. Investors from top tier cities who prefer to invest in Direct Plans of MFs may prefer to invest through mf utility.
      But it may not take away the entire market share as some of the online platforms are of top class, provide good customer service, lot of value added features and also wider choice (multiple product options not just MF). It is always good to have more options as an investor.

  • SASHANT says:

    Hi,
    Kudos for the excellent qualitative handholding provided.

    I wish to start investing in ELSS this FY 15-16.
    Decided on Franklin Tax Shield Direct plan.

    My Query:
    (1) Since primary objective it is avail Tax Benefits coupled with Equity Returns, DO YOU Advise the Dividend Option so that atleast part of the Money is Received Bank by me Tax Free?

    (2) Any other ELSS scheme suggested or This one alone is good enough.

    Best wishes,
    SASHANT

  • Dhruv says:

    Hello,
    I want to start investing in MFs.
    Can I do that with this utility directly?

    Please give me the steps.

    PS: I have KYC done with my demat acc provider

  • Dr Akhil Gupta says:

    Your article is very good and thanks for sharing information.
    I recently started investing in MF with very little knowledge. I have invested in 6 MF in regular plans through MF agent.
    Now i want to know how to go for online transactions and how to convert all my regular plans into Direct plans.
    My Investment plans are:
    1. Axis long term equity fund – SIP
    2. HDFC Mid cap Opportunities Fund-G – SIP
    3. Birla Sun Life Banking & Financial Sevices Fund-G – SIP

    4. ICICI Pru Value Discovery Fund-Regular – One time investment
    5. Birla Sun Life MNC – regular – One time investment
    6. Motilal Oswal Most Focused Mid Cap 30 Fund – Regular plan growth- One time investment

    Please provide information:
    1. Which plan is not so promising, so that i can invest in other plan.
    2. Please give me websites to register for direct investment and also have scope for withdraw of money in case of emergency….
    Regards… A. Gupta

  • SP Iyengar says:

    Thanks for the good article. .I have come to know about MF Utility only through you. Good service. Keep it up.

  • Naveen says:

    I started investing in mutual fund from this month only.. Just I bought axis long term equity fund elss for 1000 rs directly from axis mutual fund online site in..I selected option is MF direct growth.. My doubt is “the way I did is it same as mutual fund utility” what is can is it different… How can I show this investment for tax automatically will it reflect in my pan

    • Dear Naveen,
      Good to know that you have chosen to invest DIRECTLY.
      You will get a MF statement from Axis and that can be your investment proof to claim tax deduction under section 80c.

  • Sanjay says:

    Hi Sreekanth,

    I am a NRI from USA since few years. When I was working in India I had invested in mutual funds. But now due to FATCA and other regulations I am having touch time getting any brokerage house / online portals / AMC which accepts investments from US NRIs. Are you aware of any Fund houses or online portals which allow US NRIs to invest? Do you have any other suggestions for me on investment in Indian mutual funds?

    Thanks,
    Sanjay

  • Arun says:

    Hi sir,
    I started investing on mf on April 2015 . I came to know about mf utilities only on may. I got my kyc registered and also my CAN number. My question is if I want to invest using CAN ,should i still contact POS ? And I have already using sip for my old mf . So for creating a new portfolio using CAN should I use the CTF form . And I saw only 6 mf is allowed in that form. So should I put my old mf also in that. Because I ll be giving only one cheque for all fund which I ll be creating, so will my old fund also will be mapped with this cheque?

    • Dear Arun,
      As of now you need to contact POS to invest via MFU. Soon, they will launch online facility to invest in regular & direct MF schemes.
      Yes your existing MFs can be mapped.

  • Harish says:

    Hi,
    Typically direct fund options are not coming with any ratings (CRISIL etc..). Also they are very recently launched which I understand is based on SEBI’s direction to allow direct option just few years back. Should we be concerned that there is no rating for the direct mf options?
    Ex: franklin tax shield regualar has a rating while the corresponding direct option does not have any rating and it is recently launched.
    Is there a difference in how a direct vs regular option funds are maintained ( from performace and pirtfolio perspective)? Please advise.
    Thanks

    • Dear Harish,
      What are your financioal goals?
      Whether a fund is a Regular one or a Direct one, the portfolios (fund’s investments) are same. It’s just the intermediaries are not involved in DIRECT schemes. So, you can get slightly better returns (when compared to Regular one) from a Direct plan.

      • Harish says:

        Sree,
        Calculated an FV for education (assuming current value 15 L, 10% inflation for 20 years, rate of return 10%). Based on this I’m looking for a target of 2 Crore in 20 years (For two kids college education). Following are the reasons:
        a) A daughter (1 and details years old , one more addition by end of this year.
        c) I’ve a insurance –
        Jeevan anandh – started in 2008 for 25 years) 5 L sum assured
        Jeevan Surabhi – started in 2005 for 25 years) 1L sum assured
        For my wife: started in 2007 for 25 years) 2L sum assured
        d) Have a home loan for 23L, monthly EMI of 23K

        I was planning to start the SIP on 1 Large cap, 1 diversified , 1 Mid & small cap and 1 balanced.

        UTI Equity fund (G)
        Franklin India Prima PLus
        HDFC Mid cap
        Tata Balnced
        was in my list.

        Allocation of 20 K across these funds monthly , equally.

        Can you please suggest….
        Thanks

  • Satya says:

    Hello Sreekanth

    I want to invest 6k p/m into mutual funds. I am new to this. Please suggest me 2 to 3 Plans so that I can divide the amount accordingly. I want to invest for more than 10 years.

    Regards
    Satya

  • Mani Sri says:

    Dear Pradeep,
    Very informative article on MFUI. But what is the difference between this service aggregator and the CAMS, apart from the sponsors and the number of AMCs they are tied up with? What specific advantages MFUI will bring that CAMS cannot or vice versa? Would appreciate your feedback

    • Dear Mani Sri,
      There is an expectation that MF Utility will soon provide online investment option across all funds schemes for direct plans too. Do you agree with me?

      • mannisri says:

        Yes, I read that in a few months time they are likely to start the online transactions for the AMCs they are tied up with. But then, CAMS is also having the invest online facility. Hence I was not able to understand what is the comparative advantage / disadvantage of the two service aggregators? (I only note that at present 25 AMCs are tied up with MFUI whereas only 9 are tied up with CAMS. AMCs like Reliance wants to play islanded)

        • Dear Mannisri,
          Yes, MF Utility can be another online (free) option for investors.
          Do CAMS provide an option to invest in all schemes? Since MFU is industry sponsored, we can expect all AMCs to be part of it. What is your view?

  • pradeep singh says:

    sir i have 10000 thousand rupees ///and i want to invest this for maximum return from shair market ////plz provide best compamy who will grow in 1-2 year

  • a.k.Mishra says:

    I am 58 ye are old I am retired on this month . I want to known where my pf amount investment should be done .

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