May 17, 2019

Best Direct Mutual Funds Platforms 2019 – A complete list

Which are the Best Direct Mutual Funds Platforms 2019? How to choose online and cost-effective Best Direct Mutual Funds Platforms in India in 2019? There are many platforms with different features and pricing. Hence, let us discuss this which is best suitable for you.

What is a Direct Mutual Fund?

Direct Mutual Funds means investors buy Mutual Funds directly without any middlemen. There are many portals which offer such DIRECT Mutual Fund buying platforms and apps.  Whereas regular mutual funds mean investors buy through middlemen (online or offline) like mutual fund advisers or brokers.

Due to the absence middlemen cost, such direct mutual funds offer you at lesser expenses than regular funds. The direct mutual fund has a lower expense ratio than regular funds. Because of this, the NAV of a direct plan will be higher than the NAV of the regular plan.

Difference between Direct Mutual Funds and Regular Mutual Funds

# Expense Ratio

The Direct Mutual Funds expense ratio will be lesser than the Regular Mutual Funds. However, the difference varies based on the type of funds you choose and the particular fund.

# NAV

Due to the absence of expense of middlemen, the NAV of direct and regular funds will be the difference. The NAV of Direct Mutual Funds will be higher than Regular Mutual Funds.

# Fund name

The fund name for regular funds will be like HDFC Top 100-Regular-Growth., However, for direct funds, the name will change as HDFC Top 100-Direct-Growth.

Also, you notice in your account statement, the ARN field will be mentioned as DIRECT.

# Returns

Due to less expense ratio, the returns will definitely higher than the regular funds. Even though the difference is around 0.5% to 1%, if you compound it for long-term, then it creates a huge cap.

For example, let us say Rs.1 lakh investment in a Direct Plan and a Regular Plan over 40 yrs. Your investments will be worth 35% more in just 20 yrs when you invest in Direct Plans (Assumption a 12% Return on investments and a Total Expenses Ratio of 1.0% for Direct Plans and 2.5% for Regular Plans.) Look at the below chart.

Direct Mutual Funds Vs Regular Mutual Funds

Image Courtesy-Kuvera

Do remember that in the case of both regular and direct mutual funds, the investment objective, asset allocation pattern, risk factors and the fund managers are the same. But due to the difference in expense ratio, your possibility to earn more than regular will be sure.

Advantages of Direct Mutual Funds

Below are the few advantages of investing in Direct Mutual Funds.

# Expense Ratio

As I explained above, due to the absence of middlemen the expense ratio of direct mutual funds will be lower than regular plans.

Even though the difference is around 1% to 0.5%, but in long run, this may create the huge difference. For example, if we consider HDFC Top Fund-Growth, then the expense ratio of regular funds is 2.04%. Whereas the expense ratio of direct funds is 1.29%. The difference of 0.75%. Even though such difference may not look big. However, if you are a long-term investor, then each year’s such 0.75% will create a huge difference.

Do remember that the expense ratio between direct and regular will not be the same for all types of schemes and for all funds. It depends on the category of the fund and depends on the particular mutual fund.

I explained to you about the expense ratio difference between direct and regular of HDFC Top 100-G. However, if you look at debt funds, the difference is lesser than equity funds.

For example, HDFC Liquid Fund-G expense ratio for regular funds is 0.20% but for direct funds, it is 0.10%. The difference of 0.1%.

Hence, the expense ratio between direct and regular funds depends on the category of the fund and the particular fund.

# Control in your hand

Due to the absence of any middlemen, the control of investment is in your hand. If you are the DIY (Do-It-Yourself) investor or hiring a Fee-Only Planner, then opting such direct mutual funds will give you an edge.

You can manage your money as per your wish but for that, you must know what you are doing!!

Disadvantages of Direct Mutual Funds

# Service hurdles

As there are no middlemen involved, you have to take care of processing activity which involves like KYC formalities and all. If you opted for offline mode, then form filling and submitting to respective AMC is the headache of yours.

Along with this, in a later stage, you may need to change the bank, nominee or change in KYC. In such situations, it is you who has to take care of all these processes.

# May not suitable for all

If you are a DIY investor or hire a fee-only planner, then such direct funds will give you an edge over regular funds. However, if you are the first time investor or don’t know about mutual funds, then the same investment may sometimes be hazardous.

Hence, know about yourself and the need to choose between direct or regular.

Best Direct Mutual Funds Platforms 2019 – A complete list

Now you understood the meaning of direct mutual funds and to whom such funds are suitable. Let us move on and find out the Best Direct Mutual Funds Platforms in India to invest online.

Currently, there are around 22 platforms through which you can invest in direct mutual funds. Choosing the best direct mutual fund platforms among them is not so easy but not so difficult also. However, considering the cost factor, I have shortlisted as below.

Best Direct Mutual Funds Platforms 2019 - A complete list

Note

  • Platforms which are totally free of cost are highlighted with green.
  • Above chart is prepared based on the prices showed as on today. You have to refer the cost before jumping into investment.
  • Orowealth, Savvy are not free earlier when I wrote a post. However, currently, they are offering at free of cost.
  • Unovest pricing is unclear to me and Upraise website is not opening.

I will now divide the Best Direct Mutual Funds Platforms in India to invest online into three categories.

# Category One-Through Mutual Fund Companies portals

It is easy and no headache of relying on anyone if you are already KYC complied. However, the only hurdle is to remember the login details of each company portals. This is completely FREE.

Generating report is not an issue as you will get the consolidated account statements from NSDL.

However, one of my blog readers (who commented below) raised valuable points. Hence, sharing the same here for the benefits of all readers. Thanks, Manu.

In case of investment directly through respective AMC portals, apart from having multiple logins, I find the following points too:

1. Have to upload bank proof, PAN, KYC, each time for a fresh folio.
2. There would be issues while transacting physically, for eg., if you need to nominate or update nomination, some AMCs don’t allow it online. When you do it physically, there can be issues of signature mismatches, as some AMCs don’t have your signature for online created folios.
3. To update nominations or bank accounts, you need to run after each AMC separately.
4. To start SIPs, for each AMC, you need to give NACH mandates or use the biller route if your bank supports it.
5. All over above, each AMC has different interfaces, methods and practices.

In case of investment through MFU, I find the following benefits which other direct platforms do not have:

1. All existing folios, invested through any other route will be mapped here. And thus, nominations, bank accounts will be updated to old folios also.
2. A well-built grievance resolution routing mechanism. Even if the query relates to AMC or RTA, you can get it resolved from here.

# Category Two-CAMS/Karvy and MF Utility

You can utilize the CAMS facility for the Mutual Fund Companies to which it is a service provider. For the others, you have to rely on mutual fund companies portals only. As of now, CAMS provides services to below mutual fund companies.

  1. HDFC Mutual Fund
  2. DSPBR Mutual Fund
  3. Birla Sunlife Mutual Fund
  4. HSBC Mutual Fund
  5. ICICI Prudential Mutual Fund
  6. IDFC Mutual Fund
  7. IIFL Mutual Fund
  8. Kotak Mutual Fund
  9. L&T Mutual Fund
  10. Mahindra Mutual Fund
  11. PPFAS Mutual Fund
  12. SBI Mutual Fund
  13. Shriram Mutual Fund
  14. Tata Mutual Fund
  15. Union Mutual Fund

Karvy also offers the direct fund platform. Using Ktrack app of Karvy, you can buy the direct mutual funds. Using Karvy platform, you can buy the below AMCs direct funds.

  1. Axis Mutual Fund
  2. Baroda Pioneer Mutual Fund
  3. BOI AXA Mutual Fund
  4. Canara Robeco Mutual Fund
  5. DHFL Pramerica Mutual Fund
  6. Edelweiss Mutual Fund
  7. IDBI Mutual Fund
  8. India Bulls Mutual Fund
  9. INVESCO Mutual Fund
  10. JM Financial Mutual Fund
  11. LIC Mutual Fund
  12. Mirae Asset Mutual Fund
  13. Motilal Oswal Mutual Fund
  14. Peerless Mutual Fund
  15. Principal Mutual Fund
  16. Quantum Mutual Fund
  17. Reliance Mutual Fund
  18. Taurus Mutual Fund

MF Utility is one more FREE platform which supports all AMCs (Except Mirae Asset AMC and Canara Robeco AMC). Hence, it is one of the best and cheapest online platform in my view.

# Category Three-Online Platforms from SEBI RIAs providing Robo Advisory

Remaining all fall under online platforms from SEBI RIAs who provides Robo Advisory or just provide you an online platform to invest in direct funds.

Here, few portals are dependent on MF Utility. Rest of all portals provide you independent service without relying on MFU.

When I last time wrote a post on this, ET Money and Paytm Money Apps were not in the list.

Top 5 Best Direct Mutual Funds Platforms 2019

Each platform provides certain positive and negatives. Hence, it is up to you to choose the one which is suitable for you.

However, in my case, I prefer the below choices.

  • MF Utility
  • Kuvera
  • Groww
  • ET Money App
  • PayTm Money App

If you are OK with multiple Login issues, then you can use respective AMC Portals, CAMS and Karvy also.

Do remember that these are my choices. It may not be the same as your’s also. Also, in the above list, I tried myself to bring in all platforms listed. However, if there are any missing, then I will update the same.

31 Comments

  1. What kind of service issue are in zerodha demat a/c

    Reply
    • Dear ASD,
      Holding units unnecessarily in Demat format is not at all required.

      Reply
  2. What is your opinion of INDWealth? They also offer direct mutual funds and robo advisory? I have been using IndWealth, it is not completely free, but customer support is prompt.

    Reply
    • Dear RS,
      If you are comfortable, then go ahead. At the end of the day they are just platforms and that’s it.

      Reply
  3. Hello Sir,
    What is your opinion on goalwise ?

    Reply
  4. sir, what is the loss if the units are held in demat form in Zerodha ?

    Reply
  5. Piigy is also a free direct mutual fund investment platform and quite easy to invest and track.
    Maybe you can add it as well so that investors can evaluate it.

    Reply
    • Dear Ajeet,
      Let us see their sustainability from offering the FREE.

      Reply
  6. Informative article. Goalwise is another app that you can add to your list as it now provides Direct Mutual Funds and is completely free. I have been using it as it had the highest rating on the play store and FB.

    Reply
  7. Dear Basu Sir,

    As usual a very informative article..Thanks for ur effort n support.

    Reply
  8. This is a great post. One questions I have is…if I start using Kuvera and after some years want to move to MFU…will that be possible? My concern is that I should not be dependent on Kuvera only. If I can move to another platform, how will I do that? I mean will I need to delist Kuvera with my bank etc? Also, will I need to change anything with the AMCs? like RIA etc?

    Reply
  9. Dear Mr. Basavaraj,
    Thanks for investing your effort in this blog. I have been using MFUTIL for a long time. The only grievance I have is that I cannot see the Purchase Cost and Present Value and also the Profit percentage and XIRR for my investments. Is there an easy way to import data in excel from MFUTIL and use it in some other portal for portfolio management. I am not happy with interface provided by Value research for this.

    Reply
    • Dear Bhaskar,
      For transaction purpose, you can use MFU. To track your portfolio, I can suggest you to use the valueresearch.

      Reply
  10. Paisabazaar is alos free plaform. I am using it since last one year with ease. But It is available only on web and there is no app.

    Reply
    • Dear Paresh,
      Thanks for your updates. But I am unable to see their cost structure.

      Reply
  11. as usual very informative and upto point honest and unbiased info.hats off to you.

    my findings are mfutility is ahead of all also mirae and can rabecco are now available .kindly rectify

    Reply
  12. Hi Basu sir
    Thanks for writing such good informative Blogs.
    To all others,
    Last year (15 months) I was myself doing research to find good direct investment platforms and landed up with this blog of Basu and I need not further research because everything was there and it was clear which platform has what. I decided to go with Kuvera and till date its working fine with me. Absolutely no charges, they have most of the fund houses. They did not have Franklin when I started with them but now they included. Even I had doubt whether they would charge somewhere but actually they are very transparent. They have few other different services which are chargeable only if you opt for such services they will charge u or else no. Investing in direct funds is for free and I have not faced any issues. I suggested to few of my friends and even they have no issues with Kuvera and no extra charges.
    Thanks to Basu sir for suggesting all platforms unbiased so that we can select which suites us. I initially thought will go with Zerodha last year but it was clearly mentioned by Basu that it stores units in DMAT format hence I selected Kuvera and it really helped me. My suggestion, fF some one invests through respective AMC then I recommend to import complete portfolio to wealthtrust (which is closed now and sold to Orowealth) for graphical look and feel.

    Reply
    • Dear Sat,
      Thanks for your valuable inputs and it really helps to other readers.

      Reply
  13. Hello Basu Sir,

    What are your views about Zerodha Coin?

    Thanks

    Reply
    • Dear Santosh,
      Their mandatory holding of units in demat format is the biggest negative point.

      Reply
      • In what way sir ? please let me know .

        Reply
  14. Dear Sir,

    In case of investment directly through respective AMC portals, apart from having multiple logins, I find the following points too:

    1. Have to upload bank proof, PAN, KYC, each time for a fresh folio.
    2. There would be issues while transacting physically, for eg., if you need to nominate or update nomination, some AMCs don’t allow it online. When you do it physically, there can be issues of signature mismatches, as some AMCs don’t have your signature for online created folios.
    3. To update nominations or bank accounts, you need to run after each AMC separately.
    4. To start SIPs, for each AMC, you need to give NACH mandates or use the biller route if your bank supports it.
    5. All over above, each AMC has different interfaces, methods and practices.

    In case of investment through MFU, I find the following benefits which other direct platforms do not have:

    1. All existing folios, invested through any other route will be mapped here. And thus, nominations, bank accounts will be updated to old folios also.
    2. A well built grievance resolution routing mechanism. Even if the query relates to AMC or RTA, you can get it resolved from here.

    Reply
    • Dear Manu,
      Thanks for your valuable inputs. I have added the same in the above post.

      Reply
  15. Mirae Asset AMC and Canara Robeco AMC is now available in MFU.

    Reply
  16. Thanks for the summary. There is definitely something that more than meets the eye for sites like Paytm Money, Kuvera, etc.

    In the list, fund houses / CAMS / Karvy are absolutely clear. There is no extra cost beyond the usual ones.

    MFU is funded by all AMCs who participate. The funding required to meet operational costs is transparent and straightforward.

    I have serious questions on “free” third party sites like Kuvera, Paytm Money, etc. No business does charity. When money is not taken from investor, it should come from somewhere else. Only other source is the fund house itself.

    I am reasonably sure that there is a back channel involved between fund house and these sites. Indirect evidence – growing expense ratio of direct mutual funds.

    At this rate, there will come a day when cost difference between regular mutual funds and direct mutual funds is negligible.

    The losers are direct mutual fund investors 🙁

    Reply
    • Dear Anand,
      Your questions are valid. But many of my clients felt it difficult to handle MFU (especially non-tech and first-time internet users). However, I always skeptical the private player’s FREE module exactly like you. Hence, I suggest adopt one platform as long as they offer at free. If they start to charge, then switch to the one where you have comfort. At the end, they are just providing us the platform. Out investments are in no way linked with them.
      My first preference is always MFU, CAMS, KARVY and respective AMC portals. But AMFI, AMCs and SEBI have to think seriously to make MFU a user-friendly

      Reply

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