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.
I think both DPs and AMCs are same w.r.t safety and security of investments. And all these being connected with technology, and not physical, the possibility of fraud happening at one level or another always exists, and I AFAIK, I haven’t come across any theft of data which has resulted in the loss for investors, apart from the glitches while making transactions, which are common.
I would worry, if a breach happens and data is stolen, which results in unaccounted units, ambiguous statements, and I guess one solution here can be, to maintain our own records with statements downloaded regularly, and checking regularly if all the transactions are correct or not.
Been investing for some years both through AMCs and demat, never had any suspicion, nor the worry.
If you are really concerned, use a basic phone with no internet connection for all the financial transactions, so that we can eliminate the threat of intrusions through net.
We already have multiple threads on mutual funds. Please move the content there as there is no need for additional thread.