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I have opened saving bank account in name of my minor child to start sip in equity mutual fund. I have been in touch to Axis mutual fund Relationship manager. For KYC purpose he is insisting to visit karvy office rather than visiting his own company Axis amc office. I do not understand why he is insisting for karvy to do KYC purpose? Whether I will get Regular mutual fund through karvy or will get direct plan. Is karvy is acting as middle men who will increase the expense ratio of mutual fund? Can anybody help me in understanding this?

You can set up a SIP into MF in the name of minor child and transfer money from your bank account also.

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You may have done your KYC for investing for yourself. But as this is a new investment in the name of a minor, a separate KYC might be required. You may have to submit documents of both the minor and the guardian. The forums that need to be filled, the process could be different compared to investing for self.

KYC is not done by the mutual fund houses, it is done by CAMS and Karvy as they are the intermediaries who maintain all the records of investors, they do all the paper work.

So IPV, in person verification has to be done and this is a one time process. Once completed you need not visit them again.

And you don’t need to mention if you will be investing in direct funds or investing with the assistance of a distributor in regular funds. You just need to mention the mutual fund houses, because Karvy or CAMS serve different fund houses. For example, if you are first time investor who did not do KYC, go to Karvy and say that you will invest in Birla funds, they will tell you to go CAMS, as Karvy does not cater to Birla fund house.

So yes, as this is a new investment in the name of a minor, the KYC is required.

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I have been with Axis AMC for almost 2 years in Axis small cap fund. Recently I have taken Axis Nifty 50 index fund for my daughter.I have been with axis due lower expense ratio with pretty good track record. With recent allegation on its two fund managers which-involved in front running it has completely shaked my confidence in mutual fund industry. I have another one PPFAS for foreign expousre. What piece of advise we as mutual fund holder seek to follow while investing our hard earned money in these fraud funds? Please come forward and share your experiences so that we all as community get protected from these fraduster fund manager.

I don’t have investments with Axis equity funds, I have some debt exposure. So I cannot possibly comment on this.

Look at this and see if it helps.

On a personal note, I guess as retail investors, we don’t have any control over what they do beyond a point, as individual investors. Even collectively, we can do only so much, but we need regulator’s help. We can collect as much information as possible before investing and after investing too, but beyond a point, we cannot do anything else on our own.

On the other hand, we cannot completely discard capital market investments if we have goals and plans for our future. Yes, we can depend solely on sovereign guaranteed products, but we need to invest more here, as the return is less. Some can do this, most cannot. Each individual’s situation is different.

And I understand your hurt, and anger. I lost money in IL&FS fiasco in the past when my debt fund invested with them.

But don’t take decision in haste, think it through and then take a decision.

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I have visited surat Axis AMC office for starting sip on behalf of my minor daughter. I have also opened separate sbi saving account on my daughter name under my guardianship. Inspite of 3 months of registration, my sip in Axis index fund does not started. On further inquiry with Axis AMC, i got to know that due to incomplete kyc from the sbi, sip amount is not getting deducted. When I approached sbi home branch, they are telling that without kyc, bank account no. cannot be generated. I am sandwitched between two institution namely sbi bank and Axis AMC and struggling and suffering a lot. Can anybody guide me as to what to do under such condition or whom to complain? Some are advising me to open hdfc bank account and get their sip started from them but I know that if I take bank route to start sip they will always sell Regular plan to me.

Why cannot you invest on your own, on a particular date, instead of SIP? If a proper bank account is opened in the name of the minor, and if it has internet banking, you can use this account and invest yourself, in the name of the minor, in as many funds and fund houses as you want to. It does not take more than 5 minutes for 1 such transaction.

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Sir I have complained to banking ombudsman. Let see what happens and Axis AMC is suggesting to open another minor bank account in hdfc to start sip as PSU banks have lot of tantrum regarding minor investing.Sip ensures disicipline thats why I am avoiding to invest directly.Human behaviour will restrict me to invest regularly in disciplined way and forces to time the market which is not my area of strength.

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Finally SIP on behalf of my minor daughter’s name started. SBI is having worst customer satisfaction. Had to literally fight with Sbi employees. Finally Twitter helped me when I twitted the whole sbi issue to PMO office. I have taken 6k in Axis small cap direct growth and 4k in Axis nifty 50 index direct growth plan monthly sip. Finally I am thankful to this forum in guiding me correctly. As far as debt investment bucket is considered, i have opened sukanya samridhi yojna account. Is any thing else is needed to do financially as a father for my little daughter? All suggestions are welcome.

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Did you take insurance, a term plan?

Small cap funds are volatile in nature, they may not give returns every year, they may even go down by 20% and stay there for some time, so should know what to do then, will you continue your SIP, or stop and wait for the small caps to start moving up?

How long will you continue investing, what is the time frame and return expectation, is there an end number, a corpus?

In investing a plan comes first, and then the investments.

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My spouse is working so in my absence she can take responsibility of my entire family financially. She knows every detail of my investment. She also have an equity portfolio just like me. We talk daily about stocks and investment thesis. So i don’t think term insurance can serve any purpose for me. I am investing on my behalf of daughter upto 18 years of her age. The money which I am investing on my daughter behalf is not required in near future due to emergency fund which we have built. Emergency fund will fullfill any exigency situation. Monthly salary will maintain liquidity. Loss of job is not applicable to me as I work in highly specialized and regulated sector.

Thanks and will look for future discussion.

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Term insurance is a must. What if both the parents die in an accident? Who will take care of daughter’s all expenses and , education costs and marriage expenses etc?

Generally when Term.insurance is decided , ppl dont give a proper thought for the amount required. They just take 1 cr or 2 cr etc.

But there is a scientific process to arrive at it.

Just like we need capital in business, we need capital for our family, if we consider family as business enterprise.
There are 4 types of capital and their anology in family case

  1. Working capital = to cover Your monthly expenses.
    For example, if you have monthly expenses of
    50 k that means yearly 6 lakhs, so to get 6 lakhs yearly with 6% Guaranteed returns , you need a capital of 1 crore. So if you keep 1 crore in a fixed deposit of SBI, your daughter will get montly 50k for expenses. So working capital works out to be 1 crore.

  2. Fixed Capital- this is Your children’s Higher education, and marriage expenses and also if possible their settling down funds.
    Suppose your daughter wants to do MBBS and today the cost is 50 lakhs and by the time she does it , cost will be 2 crore then thats fixed capital, for marriage may be another 1 crore and for settling down it means if you want to provide a seed capital to help them start a business or giving help to settle a clinic , 1 crore ,
    So fixed capital works out to be 4 crore.

  3. Outward liability - this will.include all your loans , like.home loan, car loan, personal.loan and also those loans of others where you are a guarantor.

  4. Emergency capital- thos can be anywhere from 20 lakhs to 50 lakhs…

So total capital is addition of these 4 types of capital…this much Term.insurance you should take to cover these needs…

There is more sophisticated way also where, your earning capacity in next 20-25 years is calculated based on your education and experience and then extrapolated and then arrived at your Human Life Value.

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Although, what you have said is not new, I had never thought about this scary but practical aspect. More so, when we hear about accidents. I think many don’t think about this, particularly men.

We always think that if something would happen us, our women both older and younger will be taken care of, but what if the something happens to those older women too, in which case, the younger ones will be orphans, but at least if they don’t have financial problems, it is somewhat alright.

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Hi,

I am pretty confused about the safety of mutual funds when I invest via Zerodha vs HDFC mutual fund Sahi Hai platform. Both the platforms give me a direct plans to invest in the mutual funds, but Zerodha has a DMAT account associated with it. (CDSL)

Does a DMAT ensure a safety that AMC will not do bogus transactions on behalf of the investor? How does SEBI ensure safety in mutual funds? (I know for stocks, SEBI allows to change broker if the current one goes bust, is there any safety net like this for the mutual funds via AMC as well? )

I am really cautious about the investment frauds, so just wanted to know.

Investing in mutual funds through Dmat account is equally safe as without Dmat. The only favorable thing by investing through dmat is when an investor dies. Many people dont know. When we invest in different AMCs , when investor is no more, the nominee has to apply to each and every AMC separately to get the inheritance of mutual funds proceeds. But in case of Dmat investing, they dont have to run after each AMCs, but just to the DP of that Dmat account and he gets all investments transfered in his name. That a huge benefit of investing through Dmat.

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Direct plan can be obtained in demat form? If yes… How. Pls help to understand.

if you are applying for investment in mutual funds, then in application form itself there are option whether to invest by physical mode or dmat mode…In case of dmat mode, you need to mention DP ID and beneficiary id

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Investor can also use Exchanges Mutual Fund Platform to transact into MF and that to in direct schemes. Exchange platforms are like mediator platform ( basically policy bazaar of MF). Also Exchange platform are kind of safe from data point of view.

Investing via Zerodha or via the AMC’s own platform does not make a difference in terms of safety. You get the same units. AMC companies make returns out of management fees. They have no incentives to do bogus transactions. I don’t think there is any case where such a thing has happened since the inception of the mutual fund industry in India.

There are cases where fund manager/dealers working for AMCs front run for their own benefit. So the fund holders suffer due to an increased impact cost. A lot of these people have got caught. The loss to unit holder in this case is marginal See How Axis MF fraud case was executed | Mint

Your biggest risk is underperformance or the fund manager not generating enough alpha.