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.

What is Mutual Fund Utility?

MF Utility (MFU) is a novel "Shared Services" concept by the Mutual Fund industry that serves as a "Transaction Aggregation Portal" and was introduced by the Association of Mutual Funds in India (AMFI). Customers of mutual funds can trade in various schemes offered by different mutual funds with only one form and one payment. Using a single form of payment, it links Mutual Fund clients with Registrars and Transfer Agents (RTAs), Banks, Payment Gateways (PGs), Asset Management Companies (AMCs), and KYC Registration Agencies (KRAs). It permits the filing of transactions online for a variety of mutual fund schemes. Using MF Utility, you may make simultaneous investments in several fund houses' direct plans for a variety of mutual fund schemes.

You may be wondering, nevertheless, how investing in mutual funds is improved by a direct strategy. Knowing that each mutual fund scheme has two different types of plans (direct and regular plans) may be useful. The scheme name will indicate if the fund is direct or regular. The scheme title would contain the terms "direct" or "regular." In a direct plan, you can invest directly with the fund company rather than via a distributor. As a consequence, you save money on commissions that you would have to pay a distributor from your investment in a traditional plan.

Direct plans offer a reduced expense ratio (charging 0.5-1.0 percent less) since the commission amount is not integrated into the programme. The annual proportion of assets under management that mutual funds charge is known as their cost ratio. A greater cost ratio implies you pay the mutual fund more fees annually due to the compounding impact, which eventually reduces your profits. The mutual fund's direct strategy somewhat eliminates this.

The utility of mutual funds offers you the chance to reduce the expense ratio. Now that we are aware of the advantages, let's learn how to utilise the MF utility platform.

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.

Conclusion

A centralized mutual fund distribution platform called MF Utility would make 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.

Please Note:

Please read all scheme-related documentation carefully, as investments in mutual funds are subject to market risks. I-Sec makes no guarantees about the accomplishment of the fund's goal. Kindly take note. Depending on the forces and circumstances influencing the securities markets, the NAV of the schemes may increase or decrease. The information provided here may not be a reliable indicator of future performance or serve as a foundation for comparing it to other assets. If investors are unsure if a product is right for them, they should speak with their financial advisors.

Investors should make their own judgements about investments based on their own investment objectives, financial situations, and individual investor requirements; the material supplied is not meant to be the only source of information utilised by investors. The information above should not be interpreted as an offer to trade or as advice to make an investment. Regarding the acceptability, profitability, and fitness of any item or service mentioned here, investors should form their own opinions. I-Sec and its affiliates disclaim all responsibility for any loss or harm resulting from activities made based on this information.