How Paytm Money empowers self-managed investors to build a wealth portfolio with Direct Mutual Funds?


@ Vikas Sharma | Sr Journalist

India’s homegrown digital financial services platform Paytm’s wholly-owned subsidiary Paytm Money is enabling lakhs of Indians who manage investment portfolios on their own with direct mutual fund products. The company has to date enabled & advised lakhs of such investors with apt mutual funds products.

Whenever one is looking to invest in mutual funds schemes, they have to go over numerous plans that normally address particular investment objectives. Inside each one of these schemes, the mutual fund investor has the choice to choose from the direct investment plan and regular investment plan.

What are Direct Mutual Funds?

With a direct mutual fund plan, investors can buy the units from the AMC or fund house without the requirement of any third-party agents. Since there are no brokers or distributors involved, there is no brokerage or commissions. Investors can easily purchase these funds through offline or online mode.

What are Regular Mutual Funds?

Regular plans under a mutual fund scheme are purchased through a distributor, advisor, or broker. The AMC (Asset Management Company) pays certain fees to the intermediary for selling the mutual funds schemes. It is convenient for those investors who do not have time to monitor their portfolios nor are well-informed about the market.

How Direct Mutual Funds are relevant for investors?

Investors do not have to pay any additional charges such as commissions or brokerage.

The expense ratio for direct mutual funds is on the lower side since there is no commission involved. Therefore, the returns tend to be a bit more for direct plans.

The NAV (Net Assets Value) of direct funds is always higher when compared to regular funds of the same mutual fund. Hence, your total fund value is higher in direct mutual funds.

In the case of direct funds, one has full control over mutual fund investments and can directly consult with the AMC.

Should DIY or a self-managed investor go for a direct mutual fund plan?

Do-It-Yourself investors are the ones who manage investments in direct plans on their own. They are largely forced to pay for the distributor services which they never require. Taking this into account and in the interest of such investors, SEBI asked mutual funds houses to create ‘direct plans’ for all new and existing mutual fund schemes from January 1, 2013.

Direct plans suit DIY investors as they don’t require advisory services to make investment decisions. However, this has led to an incorrect perception that direct plans are only suitable for experienced investors.

Nowadays, with the emergence of online financial marketplaces, investing in direct plans have become very simple. Information about funds is easily accessible, thus, it is a simple and cost-effective approach to investing. Also, increased financial literacy and easy access to market information have encouraged many retail investors to make their own investment decisions.

Select online mutual fund platforms offer direct plans without charging a penny for it from investors and provide market insights, fund recommendations, online tools, and calculators to help them choose their funds according to their financial goals, risk appetite, investment horizon, etc. Additionally, managing DIY investment provides a cost-benefit because investors do not have to pay fees to a third-party.

Varun Sridhar, CEO, Paytm Money said, “It is better to use direct mutual funds as investors can earn around 1% higher return on investment by opting for it. Also, I believe that when you experiment and learn about investing yourself it’s best because the reigns of your investments are in your hands. If you had invested INR 1 lakh 5 years ago in SBI Bluechip Fund Regular Plan, your investment would have grown to INR 1,98,700. Whereas, if you invested the same amount in a Direct plan, your portfolio value today would be INR 2,08,500, 9.8% more than a Regular plan over a period of 5 years.”

Benefits of investing in direct plan with Paytm Money

Invest for Free – No hidden charges, commission, or fees on buying & selling mutual funds

Higher Returns- Earn up to 1% extra returns investing in direct mutual funds.

Hassle-free Account Opening – Be Investment ready in 30 mins. 100% paperless KYC.

Portfolio Insights – View insights, statements, and track performance anytime for free. You can also find out how much more wealth you can create by investing in direct plans.

Compare – On our website you can compare the latest expense ratio of direct plans of any mutual fund.

Paytm Money is now offering the switch feature on its app. This will help you in tracking all your mutual fund investments in one place and also help you in reaping higher returns on your investments by letting you switch from Regular Plans to Direct Plans in a few simple steps. Download your CAS and upload it on our app to switch your investments. Want to invest in Mutual Funds? Choose the Direct way and invest through Paytm Money.


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