Some mutual funds allow only few specified banks for auto debit transactions
THERE is now a facility available for investors to use their mobile phones for investing into mutual funds. Now, questions arise about its feasibility for small investors and difficulty in using this mode of investment. On both these fronts, this is not a very difficult process to undertake. Here are some factors that investors need to watch out for while undertaking any action related to investing through cell phones.
Registration and availability: There are two ways that one can follow for mutual fund investment using mobiles. The first way involves transaction through SMS, while the second would involve using smart phones. The first step involves registration with the mutual fund offering this service. Since only few fund houses provide this service, it would not be possible to use this facility across all funds.
Also, in case, there is a fund that is provoding this service, it is most likely that the facility is being offered for existing folios.
Debit mandate: The main thing in the entire investment process is not the act of giving instructions for the purchase of additional amounts, but actually transferring the money required for such an effort.
This is an area that needs security so that no one can access the funds of the investor. In this process, the role of an intermediary is eliminated and the amount is directly debited from the bank account of an investor. For this, investors have to fill a form, giving the required details of his/her bank account.
However, another restriction that will come into play at this stage is that some mutual funds allow only few specified banks for transactions.
Viewing and security: After registration, investors can view the details of their existing investments and can then transact as they want.
Also, there has to be a focus on the security aspect of the investment. There are necessary safeguard built into the application and software that is used for this purpose. This will include features like SMS not being saved on the phone or the use of a personal identification number for the purpose of completing the transaction.
These are means to protect the safety of the individual and there is a need for them to ensure that they also take the required steps to safeguard their details. This is significant because if the details go into the wrong hands then there are chances that a fraud might actually take place.
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