Once I buy a Mutual Fund through Coin platform, the units will be credited to the DEMAT account. How will I be acknowledged about the investment from the fund house?
When bought through a distributor, the fund house sends an Account Statement to the investor which has folio no and other transaction details. Now, if an investor buys through Coin platform, will the fund house send an account statement to the investor with details of folio number and other details?
Will the folio number be generated for investments done through Coin platform?
How will the investor know the folio no.? I want to know the answers to these questions for 2 reasons:
What if Zerodha closes in future and if there is no folio number provided at the time of investment, how will the investor be able to sell the funds lying in their DEMAT account? The AMC requires folio number in its redemption form.
If I hold units in a direct plan of a fund house already and wish to add few more units to that folio number, how can I do it through Coin platform? Another case where I bought a fund last month through Coin platform and wishes to invest further in the same fund but in the same folio no., how can this be achieved?
Another thing which I request you to clarify is on the annual charges:
I am already a Zerodha account holder and I pay 300 AMC charges. I plan to invest more than 25000 in a year in Mutual Funds which means I need to pay 50 per month which will total to 600 per year. This will bring my total cost to 900? Am I correct? or will it be just 600?
When you generally buy mutual funds online through some distributor, they generate a folio number for you and then give you the units in non-demat form. So, here the folio number is the unique identifier for your investments and you are able to track your investments on the basis of the folio number. The folio number is generated by the AMC as soon as you make a new purchase in that scheme. Also, whenever you make the purchase this way then the AMC sends you statement for the particular transaction.
Now, we are providing you the feature of holding the units in demat form which is a more secure way of holding your units. When the AMC receives a request for a purchase order in a particular scheme then they still create a folio number but now they credit the units into your demat account. So, you have a folio number for your transaction as well as a Demat account number (16 digit number) as identifiers for your transactions. But, if the units are in demat mode then the AMC gives more relevance to your demat account number as a unique identifier.
Now, the AMC says that they cannot send you a statement for transaction done in demat mode and you will have to check the same with your Depository Participant. In this case, you demat account statement is a valid proof of investment as the fund details and units reflect in the same.
When you are investing through COIN, a folio number is also generated and you can view the same in your portfolio window after the units have been allotted.
Hopefully should not happen But, if you wish to redeem in such a scenario then you can rematerialize the units and provide the folio number as shown on COIN for the particular fund.
If you have bought a fund from elsewhere, you will be provided a folio number. But, if you have invested in the same fund through COIN then a new folio will be generated. But, whenever you make additional investments in the same scheme through COIN, the units will reflect in the same folio number.
As per your question I will have to assume that you invested Rs 25000 or more in the first one month itself in one of the direct mutual funds and there might also be a probability that you might invest more within that 1 year. So, yes the total charges would be Rs 900. But, you need to understand that if this was an investment in a regular plan then the AMC would pay us a upfront and trailing commission on the investment (which could be more higher than the annual charge of Rs 600 pa). The AMC thus deducts this cost from the NAV of a regular plan and thus if you compare the NAV of any regular and direct plan of the same scheme, you will observe that the NAV of a direct plan is higher than the NAV of a regular plan. We are still charging a nominal cost compared to other online direct plan distributors.
Also, as a business we are providing our clients to invest in equity, ETFs, bonds also in demat form. Thus, with the AMC of charge of Rs 300, you are able to hold all these securities as well in your demat account.
You can check this post which will help you understand better about direct funds.
But, if you wish to redeem in such a scenario then you can rematerialize the units and provide the folio number as shown on COIN for the particular fund.