How to invest in mutual funds in India in three steps: Complete your KYC online (10 to 15 minutes), choose between a direct and a regular plan, and set up a SIP from as little as Rs 100 per month through a SEBI-registered platform. Every investor who has figured out how to invest in mutual funds started with exactly these three steps.
Over 27 crore investor folios exist in India, and SIP inflows crossed Rs 32,087 crore in March 2026 alone, a record, as per AMFI’s April 2026 data. That figure represents crores of ordinary Indians who learned how to invest in mutual funds and decided to act. Most never visited a branch, and most had no finance background.
This guide covers exactly how to invest in mutual funds online in India in 2026: from your first KYC form to your first redeemed rupee. You will learn how to start SIP investment, how to choose between platforms, and how to invest in direct mutual funds without a distributor. This is the practical starting point for anyone ready to begin investing in mutual funds today.
Table of Contents
Before You Start: Four Documents You Need
Before you can invest in mutual funds in India, you need four things. No exceptions.
- PAN card: mandatory for all investments above Rs 500
- Aadhaar card: for KYC verification and bank linkage
- Savings bank account: for auto-debit mandates and redemption credits
- Mobile number linked to Aadhaar: for OTP-based KYC
Your PAN and Aadhaar must be linked before online KYC can succeed. If they are not linked, complete that step first at the Income Tax Department portal before attempting any investment onboarding. Most investors complete this in under five minutes via the portal.
Step 1: How to Complete Your KYC to Invest in Mutual Funds Online
KYC (Know Your Customer) is a SEBI-mandated one-time process. Once done, it is valid across every mutual fund house in India. You do not repeat it for each new fund or each new AMC.
How to complete KYC in under 15 minutes
Step 1: Visit any SEBI-registered KYC Registration Agency (KRA), CKYC, CAMS KYC, or complete it directly during onboarding on a SEBI-registered mutual fund app.
Step 2: Enter your PAN, Aadhaar number, and date of birth.
Step 3: Verify your identity via the Aadhaar OTP sent to your registered mobile number.
Step 4: Complete the In-Person Verification (IPV) step. On most platforms, this is a five-second live selfie or a short video recorded on your phone. No office visit required.
Step 5: Your KYC is typically approved within minutes to 24 hours. Confirmation arrives via SMS and email.
💡 Know this: IPV is an SEBI requirement to prevent identity fraud. On every major app in 2026, this is a camera-facing step that takes under 10 seconds. Once your KYC is approved, you can invest across every mutual fund house in India using the same credentials.
Step 2: Direct or Regular Plan?
Every mutual fund in India comes in two versions: a direct plan and a regular plan. This is one of the most consequential decisions you will make when you invest in mutual funds online. See the full comparison in “Which plan should you choose?“ Direct or Regular? before your first investment.
| Feature | Direct Plan | Regular Plan |
|---|---|---|
| Who buys it | You, directly from the AMC | Through a distributor or advisor |
| Expense ratio | Lower (0.5% to 1% less than regular) | Higher (includes distributor commission) |
| Return impact over 20 years | Meaningfully higher due to compounding | Lower by approximately Rs 14 to 15 lakh on Rs 10 lakh at 12% CAGR |
| Where to buy | AMC website, MFUtility, MF Central | Distributor, bank, or broker |
| Suitable for | Self-directed investors | Investors who want guided advice |
For most salaried investors starting a SIP with a clear goal, the direct plan is the better choice. The expense ratio difference of 0.5% to 1% compounds significantly over a 10 to 20-year horizon. SEBI mandates that all AMCs offer both versions of every scheme, per its October 2018 circular.
💡 Know this: A mutual fund distributor earns a trailing commission from your regular plan’s expense ratio. This is not inherently wrong, but you should understand this structure before choosing one. A SEBI-registered Investment Adviser (RIA), by contrast, charges you a transparent fee and is legally required to act in your interest.
Step 3: Choose the Right Mutual Fund for Your Goal
Understanding how to invest in mutual funds wisely starts with matching your situation to a fund category, not chasing last year’s returns. Which funds should you invest in once you are ready? covers category-wise selection criteria in detail. Here, the focus is on the decision framework every investor needs before they invest in mutual funds for the first time.
A simple framework for fund selection
Your fund category depends on three things: risk profile, investment horizon, and financial goal.
- Horizon under 3 years: Debt funds or liquid funds. Equity volatility can hurt short-horizon goals.
- Horizon 3 to 5 years: Hybrid equity-oriented funds (over 65% equity) or balanced advantage funds.
- Horizon 5 years or more: Equity funds, large-cap, flexi-cap, or index funds, depending on your risk appetite.
As per SEBI’s October 2017 circular, there are 36 mutual fund categories in India: 10 equity, 16 debt, 6 hybrid, 2 solution-oriented, and 2 others. If you are investing in mutual funds in equity for the first time, a large-cap index fund or a flexi-cap fund is the practical starting point. Broad diversification, professional management, and no single-stock concentration risk are built in from day one.
💡 Know this: SEBI’s portfolio concentration rules cap a single stock at 5% of any fund’s portfolio, any single sector at 25%, and group companies at 10% of AUM. Your money is structurally diversified the moment it enters any SEBI-registered equity fund.
Step 4: SIP or Lumpsum?
For most new investors, learning how to invest in mutual funds begins with a Systematic Investment Plan (SIP). Lumpsum investment makes sense when you have a large idle amount and are comfortable with short-term market volatility. Learn about SIP before setting up your first investment. Covers SIP mechanics, strategies, and step-up SIPs in full detail.
| SIP | Lumpsum | |
|---|---|---|
| Starting amount | Rs 100 per month (general SEBI guideline) | Varies by fund, typically Rs 500 to Rs 5,000 |
| Market timing risk | Averaged out via rupee cost averaging | Fully exposed at the entry point |
| Suitable for | Salaried investors with regular income | Those with a large idle corpus to deploy |
| Flexibility | Start, pause, increase, or stop anytime | One-time deployment |
SIP contributions in India hit a record Rs 32,087 crore in March 2026, as per AMFI’s April 2026 data. That sustained participation across 9.72 crore contributing accounts through a month when markets fell nearly 9.4% shows what disciplined investing looks like in practice. You buy more units when prices fall, and that is the entire point.
Use the 1% Club SIP Calculator before committing. It shows exactly how much a monthly SIP can grow over time and helps you calibrate the right amount to invest in mutual funds, given your income and goals: Calculate how much your SIP can grow
Step 5: How to Set Up Your First Investment Online
Once you have chosen your fund and investment mode, here is how to invest in mutual funds online, step by step, on any SEBI-registered platform.
Setting up a SIP online
- Step 1: Log in to your chosen mutual fund app or AMC website.
- Step 2: Search for the fund by name or browse by category.
- Step 3: Select “SIP” and enter the monthly amount. The minimum is Rs 100 on most platforms; verify with the specific fund’s scheme information document before investing.
- Step 4: Choose your SIP date. A date 2 to 3 days after your salary credit ensures a smooth auto-debit every month.
- Step 5: Set up an e-mandate via UPI AutoPay or NACH to authorise automatic monthly deductions from your bank account.
- Step 6: Confirm and submit. Your first SIP units are typically allotted within 2 to 3 business days.
Understanding your mutual fund folio number
Once your first investment processes, the mutual fund house assigns you a folio number. It is your unique account identifier with that AMC. All your investments in different schemes from the same fund house sit under one folio number.
If you invest in schemes from two different AMCs, you will have two separate folio numbers, one with each house. Your folio number appears in the investment confirmation email and in the “My Investments” section of your app. A Consolidated Account Statement (CAS) from CAMS lists every folio you hold across all AMCs in one document.
💡 Know this: You can hold multiple schemes under one folio with the same AMC. This keeps your portfolio manageable without creating separate accounts for every scheme you invest in.
Calculate how much to invest based on your goals before finalising your monthly SIP amount. The 1% Club Goal SIP Calculator reverse-engineers your required monthly investment from your target corpus and timeline.
Best Mutual Fund Apps to Invest in India
The right platform to invest in mutual funds online determines whether you pay direct-plan costs or regular-plan costs for the next 20 years. Choosing correctly here is as important as choosing the right fund.
| Platform | Plan Type | Best For |
|---|---|---|
| 1% Club | Direct + Education | Investors who want financial education and direct investing in one place |
| MFUtility (MFU) | Direct | Multi-AMC direct plan investing from a single dashboard |
| MF Central (mfcentral.com) | Direct | SEBI and AMFI-backed portal, free, no distributor angle |
| AMC website | Direct | Investing directly with a single fund house |
| Distributor or bank platform | Regular | Investors who want a human advisor guiding their fund selection |
The 1% Club app is built for self-directed learners who want to understand what they are buying before they buy it. Direct mutual fund investing, financial education, and a suite of planning tools sit in one place. Download the 1% Club app to invest in mutual funds in direct plans and start your first SIP today.
For a mutual fund office near me: if you prefer in-person assistance, every AMC has registered branch offices, and CAMS or KFintech service centres operate across all major Indian cities. You can locate registered AMC offices via SEBI’s SCORES portal. However, for most investors, investing in mutual funds online through a direct plan is faster, costs less, and requires no paperwork.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not indicative of future results.
How to Invest in Direct Mutual Funds Online
Learning how to invest in direct mutual funds is the single most cost-effective decision a self-directed investor in India can make. There are three main routes, each with a slightly different setup process, and all of them let you invest in mutual funds at the lowest possible expense ratio.
Route 1: AMC Website (single fund house)
Step 1: Visit the official website of the AMC whose fund you have chosen. Step 2: Register with your PAN and KYC-verified details. Step 3: Search for the scheme, select the “Direct Plan” variant (it will carry “Direct” in the plan name), and transact.
Route 2: MFUtility (MFU) (multi-AMC)
Step 1: Register at mfuindia.com with your PAN and bank details. Step 2: Create a Common Account Number (CAN), which works across all participating fund houses. Step 3: Invest in any fund from any AMC in a direct plan from a single dashboard, with no separate logins per AMC.
Route 3: MF Central (SEBI and AMFI-backed)
Step 1: Visit mfcentral.com, a joint platform by CAMS and KFintech, backed by AMFI. Step 2: Log in with your PAN and OTP authentication. Step 3: View all your existing investments and transact in direct plans across fund houses on one screen.
MF Central is fully free, carries no sales agenda, and is backed by the industry’s Registrar and Transfer Agents. It is the most reliable neutral option to invest in mutual funds online if you already know which scheme you want.
How to Redeem Your Mutual Fund Investment (Withdraw Money)
Mutual fund redemption is straightforward. For equity funds, your money reaches your registered bank account within 2 to 3 business days of placing the redemption request (T+2 or T+3 settlement). Knowing how to withdraw from a mutual fund is just as important as knowing how to invest in mutual funds in the first place.
Step-by-step mutual fund redemption
- Step 1: Log in to the app, AMC website, or MF Central where you invested.
- Step 2: Navigate to “My Portfolio” or “My Investments.”
- Step 3: Select the fund you want to redeem from.
- Step 4: Enter the number of units or the rupee amount you want to withdraw.
- Step 5: Confirm the redemption. You will receive an acknowledgement with a transaction reference number.
- Step 6: Proceeds are credited to your registered bank account within 2 to 3 business days for equity funds. Liquid and overnight funds credit the same day or next business day.
Partial redemption is fully permitted. If you need Rs 50,000 from a fund worth Rs 3 lakh, you can redeem only that amount and keep the rest invested.
Tax on redemption (Union Budget 2024): For equity mutual fund units held over 1 year, long-term capital gains tax applies at 12.5% on gains above Rs 1.25 lakh per financial year (Section 112A). For units held under 1 year, short-term capital gains tax applies at 20%. ELSS funds carry a mandatory 3-year lock-in from each investment date and cannot be redeemed before that period. For a full breakdown, see the mutual fund taxation guide.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not indicative of future results.
Do You Need a Mutual Fund Advisor to Invest in Mutual Funds?
Most self-directed investors in India invest in mutual funds without a paid advisor. The online infrastructure (direct plans, KYC in minutes, and platforms like MF Central and the 1% Club app) makes it entirely possible to invest in mutual funds online on your own at the lowest cost.
Priya, a 26-year-old marketing analyst in Pune earning Rs 10.5 lakh per annum, had the same hesitation. She thought investing in mutual funds required a financial advisor and weeks of research before you could begin.
She completed her KYC in 14 minutes on a Sunday morning and set up an Rs 8,000 per month SIP in a flexi-cap fund through the 1% Club app. She has continued investing in mutual funds through market ups and downs since, without ever speaking to a distributor or a financial advisor.
There are genuine situations where a SEBI-registered Investment Adviser (RIA) adds real value: managing a large corpus, coordinating insurance and tax planning, or building a retirement income strategy. An RIA charges a transparent, disclosed fee and is legally required to act in your interest. If you are starting a SIP between Rs 5,000 and Rs 25,000 per month with a clear goal, you almost certainly do not need a paid advisor at this stage.
Use the 1% Club tools suite to plan your goals independently. The SIP calculator, goal SIP calculator, and MF calculator are all available for free.
The Bottom Line
Investing in mutual funds in India in 2026 takes under 15 minutes to set up once you have your PAN, Aadhaar, and a linked bank account. The KYC is digital, the mandate is automatic, and there is no minimum beyond Rs 100 per month on most platforms. The only barrier to knowing how to invest in mutual funds is not starting.
Choose the direct plan over the regular plan. It consistently outperforms because of the lower expense ratio, and SEBI mandates every AMC to offer it. Use MF Central or an app like 1% Club to invest in mutual funds in direct plans without a distributor taking a cut from your returns.
Once you know the steps, you can invest directly through the 1% Club app itself, in Direct plans, with AI CFO on hand to explain the research behind any fund before you commit. Start investing in the 1% Club App.
If you are beginning with equity, start with a broad fund category (large-cap index or flexi-cap) and let rupee cost averaging do its work through market cycles. The record mutual fund redemption and SIP inflow data from AMFI March 2026 tells the same story it has for 61 consecutive months: disciplined investors do not stop. Download the 1% Club app, calculate how much your SIP can grow, and set up your first investment before the week is out.
This content is for educational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not indicative of future results.
FAQs
What is the minimum amount to invest in mutual funds in India?
The minimum SIP amount on most platforms is Rs 100 per month, as per general SEBI guidelines, though individual fund houses may set higher minimums. Always verify with the specific fund’s scheme information document before investing. Lumpsum minimums vary by fund but are typically Rs 500 to Rs 5,000. AMFI’s Chhoti SIP initiative has enabled investments as low as Rs 250 per month on select platforms. There is no upper limit on how much you can invest in mutual funds in India.
Can I invest in mutual funds without a demat account?
Yes. Most mutual fund investments in India do not require a demat account. You can invest directly through a mutual fund app, an AMC’s website, MFUtility, or MF Central using just your PAN, Aadhaar-linked KYC, and a bank account. A demat account is required only if you invest in ETFs or choose to hold regular mutual fund units in demat form, which is optional.
How do I check my mutual fund portfolio?
You can check your full portfolio — across all fund houses — using your PAN at mfcentral.com or by requesting a Consolidated Account Statement (CAS) from CAMS (camsonline.com) or KFintech. The CAS lists every mutual fund unit you hold, along with NAV, current value, gain or loss, and your folio number. Most mutual fund apps also show your portfolio on the home screen once you are logged in.
Can NRIs invest in mutual funds in India?
Yes. Non-Resident Indians (NRIs) can invest in mutual funds in India under FEMA. They need an NRE or NRO bank account, a PAN, and a completed KYC with an overseas address. Some fund houses restrict investments from NRIs based in the USA or Canada due to FATCA compliance requirements — check with the specific AMC before investing.
What is a mutual fund folio number, and where do I find it?
A folio number is your unique account number with a specific fund house (AMC). It groups all your investments across different schemes from the same fund house under one identifier. If you invest in schemes from two different AMCs, you will have two separate folio numbers. You can find your folio number in the investment confirmation email, in the app under “My Investments,” or in your Consolidated Account Statement.
Do I need a SEBI-registered advisor to invest in mutual funds?
No. Most self-directed investors in India invest directly in mutual funds without a mutual fund advisor. SEBI-registered advisors (RIAs) are most useful for complex financial planning — large corpus management, tax optimisation, or estate planning. If you are starting a small monthly SIP with a clear goal, you can set it up yourself through a direct plan on a SEBI-registered platform.
How long does it take for a mutual fund redemption to reflect in my bank account?
For equity mutual funds, redemption proceeds are credited within T+2 or T+3 business days. Liquid funds and overnight funds process faster — often the same business day or next day. The money is credited only to the bank account registered with your folio. ELSS funds have a 3-year lock-in from each investment date and cannot be redeemed before that period.
Is there a mutual fund office near me I can visit to invest?
You can walk into any AMC branch office or CAMS/KFintech service centre to invest in person. However, for most investors, online investment is faster, paperwork-free, and gives you access to direct plans at a lower cost. The SEBI SCORES portal lists all registered AMC offices if you need in-person assistance.