The mutual fund investment market in India is spreading across the country since recent years. With many new investment avenues and products, the choice remains yours. Also, with online mutual funds, beginners can better manage their favorite investments. When it comes to investments, some of the essential factors that you need to consider include investment returns, types of investments, performance, and KYC.
‘Know Your Customer’ KYC is a term used simply to identify investors and collect the required information before they start their investments. It is imperative that all investors and applicants understand the rules and regulations of the same. ‘Know Your Customer’ is an international concept where data collected from investors is used to prevent identity theft, fraud, money laundering and terrorist financing. With the help of this form, financial institutions and banks can identify investors.
Comply with KYC
In the field of mutual fund investments, the importance of KYC cannot be overlooked. When you decide to invest in the mutual funds for the first time, you must submit a copy along with the investment application forms. An investment application form that does not have KYC recognition is never approved. To become a KYC compliant in India, investors need to file the following documents with CVL, which is a secondary part of Central Depository Services Limited:
• Pan card
• Documents for residential proof such as passport, utility bill or a letter of secrecy from the housing society
• Completely filled KYC application form
Once you submit all the required documents with the investment application form, the financial institution or bank performs a proper KYC check to approve the application. Once the application is approved, you can start your investments by selecting your favorable avenues.
Mutual funds in India have always proven to be beneficial to all investors. Considering the investment benefits and wide range of products, even foreigners prefer to multiply their money with Indian investments. Generally, KYC is applicable for the following types of transactions:
• Systematic records of the Investment Plan
• STP records along with any STP-related products
• Change transactions or new purchases
• Records of DTP and any DTP-related products
For any existing DTP, STP, or SIP registration and related products, these rules are valid on the date of acceptance of the application. Existing and new mutual fund investors must submit their KYC application forms prior to investing. To help investors submit documents, registration is centralized by KYC KRA registration agencies that are registered with SEBI. Financial institutions and investment brokers provide detailed information on these standards for investors. Go online to take advantage of Know Your Client rules updates and understand the basics of investing. Please contact your financial advisor or investment broker to better understand all of these rules and available investment avenues. Multiply your money with the investment product that matches your personal needs and financial goals.