How Can I Buy Index Funds Without A Demat Account?
Index mutual funds are a type of investment vehicle that tracks the performance of a specific index, such as the Nifty 50 or the Sensex. These funds offer investors the opportunity to invest in a basket of stocks that represent the broad market, without having to select individual stocks.
Index funds have become increasingly popular in recent years, as more and more investors are looking for ways to simplify their investment portfolios. However, some investors are still unaware of how to purchase these funds without a demat account.
In this article, we will explain how you can buy index funds without a demat account. We will also provide some tips on how to choose the right index fund for your investment needs.
Investing Directly through AMC - Online or Offline:
One way to buy index funds without a demat account is to invest directly with the fund house/AMC. To do this, you’ll need to visit the website or app of the fund house and look for the option to buy index funds. Look for the specific index fund you’re interested in and follow the instructions to complete your investment. You can also visit an AMC’s office to invest in an index fund through an offline process.
You should note that, buying mutual funds from particular AMCs directly may limit your choices to compare similar funds of other fund houses in India, thus reducing the level of diversification in your portfolio.
Online Brokers:
There are several online mutual fund platforms that allow investors to invest in index funds without a demat account. These platforms provide a convenient way to buy and sell mutual funds, allowing investors to manage their portfolios from a single platform. Some popular platforms include Groww, Zerodha Coin and Paytm Money.
Mutual Fund Distributors/Advisors:
You can also invest in index funds without a demat account via AMFI Registered Mutual Distributors and Advisors who not only help you buy the index funds of your choice but also provide advice on which mutual fund schemes are best for you.
EquitySeeds Consultants is an AMFI Registered Distributor and Advisor offering investment in index funds
Banks:
Banks are the biggest channel of mutual fund distribution in India. You can invest in index funds without a demat account on the banking app or at the branch.
Tips to choose the best index funds to invest:
When choosing an index fund to invest in, it’s important to consider the following factors:
Index tracking error -
It represents the difference between the performance of the index fund and the actual index it tracks. Look for an index fund that has a low tracking error.
Expense ratio -
It refers to the fees charged by the fund house for managing the fund. Look for a fund with a low expense ratio.
Investment objective -
Different index funds have different investment objectives. Consider your investment goals and choose a fund that aligns with your objectives.
Conclusion:
In conclusion, buying index funds without a demat account is easy and can be done through direct investment with the fund house, online mutual fund platforms or through offline mode. When choosing a fund to invest in, be sure to consider factors such as index tracking error, expense ratio and investment objective.
