The mutual fund investment market in India has been spreading across the country since recent years. With many new investment avenues and products, the choice is still yours. Plus, with online mutual funds, beginners can better manage their favorite investments. When it comes to investing, some of the essential factors you need to consider include investment performance, investment types, performance, and KYC.
“Know your customer” KYC is a term used to simply identify investors and gather the necessary information before they start their investments. It is essential that all investors and applicants understand the rules and regulations of the same. ‘Know your customer’ is an international concept in which 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 mutual funds for the first time, you should send 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 must submit the following documents to CVL, which is a secondary part of Central Depository Services Limited:
• Pan card
• Residential proof documents such as passport, utility bill or a letter from the secretary of the housing society
• Complete KYC application form
Once you submit all the required documents with the investment application form, the financial institution or bank conducts the appropriate KYC verification to approve the application. Once the application is approved, you can start your investments by selecting the favorable avenues.
Mutual funds in India have always proven to be beneficial to all investors. Considering the investment benefits and the wide range of products, even foreigners prefer to multiply their money with Indian investments. KYC generally applies to the following types of transactions:
• Systematic records of investment plans
• STP records along with any STP related products
• Change transactions or new purchases
• DTP records and any DTP related products
For any existing DTP, STP or SIP registrations and related products, these rules are valid on the date of acceptance of the application. New and existing mutual fund investors should submit their KYC application forms before investing. To assist investors in filing documents, the registry is centralized by KYC KRA registration agencies that are registered with SEBI. Financial institutions and investment brokers provide detailed information on these standards to investors. Get connected to take advantage of updates on the “Know Your Client” rules and understand the basics of investing. Contact your financial advisor or investment broker to better understand all of these available investment guidelines and avenues. Multiply your money with the investment product that suits your personal needs and financial goals.