Pros and cons of Mutual funds in demat mode

The way I see it -

Rule-1 - What you perfectly said as an argument opener …

Rule-2 - Never break Rule-1. So there are no But/However/Exceptions to it …

Whenever, in doubt remember ULIPs in 2006/07/08. They make you poorer in the longer run.

I very well understand this. And I am not mixing investment and insurance. I don’t know why I mentioned it, maybe that moment I didn’t get better pointers. Let’s discard that pointer as it is digressing us from the main topic.

I have mentioned other pointers later where Zerodha has a disadvantage currently: -

  • Zerodha does not have direct SIP/STP feature yet. You are always buying in lump sum in the backend. E.g. You can’t buy SBI small cap from Zerodha which was recently reopened for SIP. You can’t invest in any fund which only accepts SIP and not lump-sum investment.

  • Since Zerodha coin is a lump-sum buying in the background, tomorrow say a fund you’ve invested in, temporarily restricts lump-sum investments till further notice, then you won’t be able to invest in that fund anymore.

  • Some mutual fund websites have an incremental upgrade of SIP amount automatically. e.g. increase 10% every quarter, year, Flexi-SIP, SIP Anyday .etc such rules which are helpful.

  • Investing in NFO is available only on Mutual fund websites. Now also launched on Kuvera.

  • Overall pie chart representation of portfolio - large, small, mid, debt etc. Which contributes to how much etc reports.

As I have mentioned above, I like Zerodha platform and earlier I have contributed to making it better as well. But the above-mentioned features are currently missing which doesn’t convince me to pay.

Dear @nithin,

I am actively looking to switch my regular funds to direct plans and have already started the cancellation of OTM and SIP of the current regular plans. Hence I am looking to shift my entire portfolio. Available options are - Zerodha and Kuvera as of now. I have invested through both to try them out. I don’t mind paying Rs 59 per month but need to know how soon or late these features will be available in Coin.

Recently, you launched Coin App. I don’t know your business objectives but as a customer, I would have been happy if you had resolved the missing features of Coin instead of launching an app for Coin.

If you can help me make an informed decision.



@rupeshmandal ,

STP/SWP will take time. But considering we are offering lumpsum reinvested as SIP. You can do a STP/SWP yourself anytime you want manually. We will bring this in the future though, with flexibility of allowing you to set rules when these have to be moved around and between different instruments. We can also give a lot more than just 10% every month etc.

For funds which block lumpsum, we will have the traditional SIP opened for those in the next couple of weeks.

NFO will take time.

hmm… building coin app vs adding features, these are different threads and built by different teams. If the features you are asking is missing, it is because of restrictions on the current underlying platform/method we follow.

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why to hold mutual funds into Demat format? is it mandatory to do it in zerodha ?
@nithin : kindly clear this point.

i have 3 ELSS funds which i have invested from last 2 yrs in COIN n as you mentioned we need to send 2 copies for every month, its a very tedious job … i need some clarification on the whole process. .

Rohan, all units in Zerodha are held in demat mode

You don’t have to do anything if you are already investing in direct funds on Coin. The 2 copies are you referring to are required in case your are transferring mutual funds to Zerodha.

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Is there any difference between SIP and regular lump-sum investment as SIP as done by Zerodha ?

Can go though this thread from start.

Don’t go for DEMAT unless you have a need, there are some challenges/over heads in DEMAT options.

Hi Skini76,
Can you please share details?

  1. Demat a/c have to be opened separately, some paper work/ one time cost is involved.
  2. Turn Around Time is higher compared to non-demat (folio) transactions.
  3. Demat account comes with a cost, at the time of sale there are charges for transfer of units

created an account here mainly to clarify that if you already have a zerodha account for trading stocks, coin is literally free. all the charges discussed here (50 for subscription and 5.5 for redemption) were waived off.

Yes, Coin is completely free.

why go for MFs .
Instead ; why not to go for ETFs ?

Ideally if the ETF has good spread and volume, you should probably prefer ETF.

But most ETFs in India don’t have this and you would find the price not reflecting the index value.