How to do KYC for Mutual Fund?: Any business that offers financial services, including banks, lending institutions, investment platforms, mutual fund companies, and insurance organisations, is required to do a background check on its clients. Instances of money laundering, fraud, and criminal activity are primarily prevented by this. Such background checks are also known as KYC. Investors have the option of completing their online KYC for mutual funds or using the offline way instead.
How to do KYC for Mutual Funds?
The term “Know your customer” (abbreviated as “KYC”) refers to the customer identification process that all financial organisations, including banks, asset management firms, and brokers, carry out. You will be required to provide identification documents such as a photo ID, address verification, and other identification documents in place of the customer identification process to prove your identity.
Why is Mutual Fund KYC Mandatory?
To ensure that investments made are genuine and prevent future instances of money laundering and fraud, KYC is required. A method is in place to ensure that everyone investing gives their true names and contact information in order to avoid any unexpected events in the future.
So, the major goal when a mutual fund KYC check is requested by an asset management organisation is to verify legitimacy. This is carried out to make sure you are investing for investment objectives and that you don’t have a history of defaults.
The Instructions to Do Online KYC for Mutual Funds
Online KYC procedures must be carried out individually with the mutual fund firm, the intermediary, or the investing platform you select. The only distinction between offline and online KYC is that you must complete the form online and upload all relevant papers. You can now get an authentication done without having to go through the laborious step of physically visiting the office.
- Access the website of any agency that has registered for KYC.
- Set up an account and complete the online form with all the necessary information.
- You will need to provide your registered mobile number, PAN card, and other personal information.
- Online document uploads with self-attestation
You will receive a KYC identity number after completing the KYC procedure through a KRA, whether it be online or offline, so you may start investing once you share it with your preferred investment platform.
Even if providing an Aadhaar for KYC is no longer required, investors still prefer to use an Aadhaar to fulfil their KYC requirements. Aadhaar-based KYC is offered by the majority of fund firms and investment platforms. If necessary, you can amend your KYC online for mutual fund investment after receiving your KYC identity number by logging into your KRA account.
Without completing your KYC verification, you are not permitted to invest in any mutual funds. Your KYC can be completed online in a short amount of time without any paperwork. After completing the online KYC form, you must provide the original papers’ scanned copies for verification. You can begin investing in the mutual fund schemes of your choosing once the document verification process for mutual funds is finished.