Mutual Fund Investment Using UPI

Due to the advent of technology, life has become simpler. There are so many things that one can now manage from the comfort of their laptop or even smartphone. If you have a decent internet connection, you can now pay all your utility bills through a smartphone using an app. Or you can simply log in to the website using your laptop and shop for clothes, electronics, accessories etc. You do not even need hard cash to make payments anymore. Everything has gone digital. There are several advantages of opting online transactions over traditional manual payments. You do not need to keep the change, the money gets electronically transferred from the buyer's account (you) to the seller’s account.

We live in a digital era and it is necessary that we adapt to the changes and changing trends in order to stay abreast with the current times. Thanks to internet age, you can now invest in mutual funds from the comfort of your home or office using a laptop or even a smartphone with a decent internet connection. Mutual funds are an investment tool that may offer investors long term capital appreciation. They are a pool of professionally managed funds that invest across multiple asset classes. Mutual funds offer active risk management and are supposed to carry a diversified investment portfolio.

These days, investors can even invest in mutual funds through UPI. But what is UPI? How is it different from other online payment options? Is it a more convenient way to invest in mutual funds as compared to other online transactions?

Let us find out.

What is UPI?

Unified Payment Interface, commonly referred to as UPI, is one of the most preferred payment modes these days. Apart from using this payment mode for payments of utility bills, buying groceries online, shopping for clothes and transferring money from your savings account to other bank accounts, UPI can also be utilized for investing in mutual funds.

Although most Asset Management Companies and fund houses offer UPI payment options for investing in mutual funds, do check whether your AMC is offering the same. Whether you are a new investor or someone who has been investing in mutual funds for the long run, you can use UPI to make your monthly SIP or lump sum investments. Investors can use UPI payment options either for their existing mutual fund investments or they can even invest in a new scheme by making the payment using UPI. Yes there are other ways you can make investment in mutual funds too. But UPI is secure, offers seamless investment experience and easily transfers money from your bank account towards the mutual fund in a jiffy. An investor doesn’t even need to use his debit/credit card number while using UPI as a payment mode.

If you are new to UPI transactions you might have to link the registered mobile number to your bank account. When you open a savings account, you link a mobile number to your account. This is the registered mobile number and you will need this number to be active if you want to set up UPI on your smartphone.

You will receive a UPI ID that is generated by the UPI app. It looks similar to your email ID.

Example – xyz@yourbankname

The UPI ID may differ from bank to bank or from UPI app to UPI app.

How to invest in mutual funds through UPI?

Investors have to use pretty much the same method to make investments in mutual funds through UPI the way they use UPI to carry out other similar transactions. When you choose the UPI payment options for paying your monthly SIP, a lump sum or for investing in a brand new scheme, you will be prompted to input your UPI ID (e.g. – xyz@yourbankname). Once you input the necessary details, you will receive a notification via text message or a digital notification on your smartphone from the UPI app that you use to authenticate this payment that is about to be carried out. Click on the digital notification and you will be directed to the UPI app where you will see all the details of the ongoing transaction. Once you proceed, the final step will be inputting your MPIN (mobile PIN) that will allow the authentication of the transaction. In an instant, the money is debited from your savings accounts and electronically transferred to the mutual fund you are investing in.

Isn’t this a simple, secure and hassle free process to invest in mutual funds? It is definitely way more convenient than visiting the fund house personally where you have to fill the form manually inputting several details and then handing over the money in form or cash/cheque. Why go through such a tiring process when technology has blessed you with a convenient and easy payment option like UPI? UPI is definitely an easy way to invest in mutual funds. However, if you are still finding it a bit confusing to grasp the investment process, do reach out to your AMC for further help.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.