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Documents Required To Buy a Mutual Fund

Mutual funds are enjoying their time in the limelight as a choice investment for many Indians. Ask around and you will find many people searching the web for the best mutual funds to invest right now. You too may have done a similar search. But before you buy a mutual fund, you must have certain documents in place. So here is a rundown of the documents required to buy a mutual fund.

Why is proper documentation important to Buy Mutual funds?

You may have a list of the best mutual funds to buy now, but are your documents ready? If you do not have the proper documentation, you may not be allowed to purchase the fund units. Correct documentation will also help avoid unnecessary hiccups and delays, tax irregularities, and phony deals. 

What documents are required to buy mutual funds?

Identity proof: 

  • You may have your choice of mutual funds to buy now but without your PAN card, you will not be able to proceed with your purchase. Your PAN card is the first and most essential document required for Know Your Customer (KYC) compliance. 
  • At least one of the following—Aadhaar card, Passport, Driving License, or Voter’s ID card. 
  • You can also submit an identity card or document containing your photo if it has been issued by the central or state government and their departments, regulatory or statutory authorities, public sector undertakings, scheduled commercial banks, public financial institutions, and professional bodies like the Bar Council, the Institute of Chartered Accountants of India (ICAI), and so on.


Address proof: 

  • Your Aadhaar card which contains your Unique Identification Number (UIN) 
  • You can also use your passport, Driving License, Ration card, and Voter’s Identity card
  • Bank account statements that are no more than three months old
  • Recent utility bills that must not be over three months old. 
  • Proof of address issued by bank managers of scheduled commercial banks, multinational foreign banks, a gazetted officer or notary, an elected representative to the legislative assembly or parliament
  • A document containing your address as issued by a government or statutory authority
  • Non-Resident Indians must submit their permanent and overseas address, a copy of their passport, and a copy of their PAN card.



If you are investing in offline mode, a cheque with the investment amount has to be submitted. If the cheque does not bear your name, then the most recent bank statement for the ongoing month must also be submitted. If you are purchasing the mutual fund online, cheque payment is not required.

For minors:

Parents can invest on the behalf of their minor children. To do so, they must fill up and submit a third-party declaration form.

How to find the best long-term investment mutual funds

It is a truth widely acknowledged that it is easier to choose the best mutual fund to invest in rather than the best stocks. This is primarily because mutual funds are safer than direct stocks and shares. Consider these factors before you buy a mutual fund:

  • Risk: Mutual funds carry their fair share of risk which could be low or very high. Figure out your capacity for risk before you invest. If you have a high or moderate risk appetite you can consider equity or hybrid funds. However, if you want minimum exposure to risk, then debt funds may be suitable for you.
  • Timeframe: The timeframe or horizon of the fund should match your goals. If you have a long-term horizon of over five years, then equity funds are your best bet as they deliver good returns while beating inflation. If your horizon is less than that, then debt funds may be a better option.
  • Growth or pay-out option: Decide whether you want to receive regular pay-out from the fund or if you would like the gains to be reinvested. The latter is called the Growth option in mutual funds and is ideal for wealth appreciation. 
  • Expense ratio: In an actively managed fund, the fund manager’s ability to deliver higher returns may compensate for a high expense ratio. In passively managed funds like index funds, where the funds track the index, a high expense ratio is a deterrent. This is because the fund’s expenses are deducted from the investor’s returns.
  • Past performance and fund manager: Choose a fund that has a strong past performance and with a manager who has proven to deliver results.


Summing up

Choosing the best mutual fund to invest in can feel like a Herculean task. However, a little research and understanding of your own financial goals will make the job easier. Don’t let your hard work go to waste, ensure that all your documents are on hand before you try to buy a mutual fund.

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