How to Use MF Utility to Invest Online in Mutual Funds?

Key Highlights

• Mutual Fund Utility (MFU) facilitates access to direct mutual fund plans, avoiding brokerage fees and retaining expense ratios.
  
• Direct plans offer reduced expense ratios, enhancing potential profitability by saving on commissions.
  
• To use MF Utility, investors need a Common Account Number (CAN) and must register online via MFU's portal.
  

The Indian mutual fund landscape has evolved rapidly in recent years, making it easier than ever for investors to diversify their portfolios and reach long-term financial goals. Traditionally, investing in multiple mutual fund schemes across various fund houses involved a lot of paperwork and coordination with different distributors or agents. This process could be cumbersome, especially for those who wanted to invest directly with fund houses to avoid extra commissions. To address these challenges and simplify the process, the Association of Mutual Funds in India (AMFI) introduced a centralised platform called Mutual Fund Utility (MFU).

What is Mutual Fund Utility?

Mutual Fund Utility (MFU) is an innovative “Shared Services” platform developed by the Indian mutual fund industry. Launched by AMFI, MFU acts as a single transaction aggregation portal, allowing investors to transact across multiple mutual fund schemes and fund houses through one unified interface. The key feature of MFU is its ability to connect investors, Asset Management Companies (AMCs), Registrars and Transfer Agents (RTAs), Banks, Payment Gateways, and KYC Registration Agencies (KRAs) seamlessly.

With MFU, investors can submit a single form and make a single payment to invest in multiple schemes from different fund houses. This eliminates the need for separate paperwork and payments for each AMC and significantly streamlines the investment process. MFU supports both online and offline transactions, making it convenient for all types of investors. Notably, MFU facilitates investments in direct plans, where investors deal directly with the fund house, bypassing distributors and saving on commission costs.

How Does MF Utility Work?

MF Utility works as a central bridge between investors and multiple mutual fund entities. It removes the need to deal separately with each fund house by bringing everything onto one platform.

Centralised Platform

MFU acts as a single point where investors can transact across different AMCs without filling separate forms or making multiple payments. Common Account Number (CAN)

Every investor is assigned a CAN, which stores personal, bank, and nominee details centrally. This eliminates repeated KYC and account setup across fund houses.

Simplified Transactions

Once CAN is created, investors can place multiple buy, sell, or switch requests through a single instruction, saving time and effort.

Connectivity

MFU connects AMCs, RTAs, banks, payment gateways, and KRAs, ensuring smooth data flow and faster processing of transactions.

How to Use Mutual Fund Utility?

• To invest in mutual funds through the Mutual Fund Utility (MFU), individuals need a Common Account Number (CAN). MFU provides a distinct CAN identifier, obtainable by completing and submitting a CAN registration form. This form can be submitted to any MF Utility India branch, a distributor affiliated with MFUI, or a participating AMC branch. Additionally, individuals have the option to register for CAN online.

• You will receive an SMS and an email verifying the CAN assigned to you to your registered email address and mobile phone after completing the CAN Registration form. It could take a week to finish this.

• After creating your CAN, you can then register for online access using their portal at https://www.mfuonline.com/. You must establish a User ID and password for the account.

• Once you have the required login information, visit MFUOnline.com to finish the transactions. You can invest in one transaction or several transactions with only one click. A single payment might cover several MF plans from several AMC fund firms.

Key Advantages of MF Utility

• Single Window Access: You can transact in schemes from multiple fund houses using a single platform, drastically reducing administrative hassles.
  

• Direct Plan Investments: MFU enables easy access to direct plans, which have lower expense ratios since they do not include distributor commissions. This can enhance long-term returns due to lower costs.
  

• Convenience and Efficiency: One-time registration with MFU provides a Common Account Number (CAN), allowing for streamlined future transactions without repetitive paperwork.
  

• Real-Time Transactions: MFU supports real-time purchase, redemption, switch, and systematic transactions, making fund management faster and more responsive.
  

• Comprehensive Portfolio Management: You can view and manage all your mutual fund holdings across different AMCs in one place, making portfolio tracking simple.
  

• Secure and Paperless: The platform uses robust security protocols and enables paperless transactions, supporting eco-friendly investing.
  

• Support for Multiple Transaction Types: MFU allows SIPs, SWPs, STPs, and lump-sum investments in various schemes through one interface.
  

• Cost Savings: By facilitating direct investments and reducing intermediaries, MFU helps investors like you save on recurring commission costs.
  

What Transactions Are Supported by MFU?

MFU supports a broad range of mutual fund transactions, making it a comprehensive platform for investors like you. You can execute purchases, redemptions, and switches across multiple fund houses using a single interface. Additionally, MFU facilitates systematic investments such as Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), and Systematic Withdrawal Plans (SWP). As an investor, you can also register and modify your mandates, update bank details, and request consolidated account statements. Both lump-sum and recurring transactions are supported. This versatility enables you to manage, track, and optimise your mutual fund portfolios efficiently and conveniently through the MFU portal.

Are There Any MFU Limitations?

Despite its numerous advantages, MFU has certain limitations that you should be aware of, as an investor. Not all mutual fund houses may be available on the MFU platform, so you might not have access to every scheme in the market. While MFU facilitates direct investments, it does not provide personalised advisory services or recommendations, which are often sought by new investors.

The platform’s interface, though functional, can appear complex to those unfamiliar with online investing or digital platforms. Some transactions, such as non-financial requests or certain updates, may still require offline intervention or additional documentation.

Additionally, real-time transaction processing depends on the cut-off times set by individual AMCs, which could result in delays. You must also ensure your KYC is updated and compliant before using MFU. Lastly, MFU does not replace the need for regular portfolio reviews and independent research, as it is primarily a transaction-oriented utility.

MFU Checklist: Considerations Before You Begin

• Before starting with MFU, ensure you have completed your KYC process and have all relevant documents handy.
  
• Register for a Common Account Number (CAN), which is mandatory for transacting on MFU.
  
• Confirm that your chosen AMCs and schemes are available on the MFU platform.
  
• Familiarise yourself with MFU’s transaction cut-off timings and processing windows.
  
• Set up your bank mandates for seamless payments and verify that your email and mobile number are updated for timely notifications.
  
• It’s also prudent to review the MFU terms and privacy policy to understand security measures and support mechanisms before initiating your first transaction.
  

Conclusion

A centralised mutual fund distribution platform called MF Utility makes it possible for investors, distributors, and financial advisors to trade in schemes provided by various fund firms all on one platform. However, be cautious and choose the appropriate MF plans based on their long-term consistency before you start investing with MFU online. In the long run, the final corpus size for do-it-yourself investors will be greatly influenced by selecting the appropriate plan that aligns with their goals and risk appetite.

Sources:

Business Standard