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How to Start Investing in Mutual Funds Online: A Step- by-Step Guide

May 22, 2025

Beginning an investing journey can be incredibly overwhelming, as the lending options are infinite. Mutual funds provide a straightforward and good way for someone who is new to investing to step into the investment world. If you are seeking a guide on how to start investing in mutual funds online in India, this guide will take you through everything in simple and straightforward prose. Let's get started!

Understand What Mutual Funds Are

Before we get into the mutual fund investment process, it's important to know what mutual funds actually are. Essentially, mutual funds take money contributed by many investors and purchases stocks, bonds, or other assets with that money. Even though you’re not the one handling the money and do not need to be an expert, you will have a professional fund manager who is either financially trained or will have some degree of knowledge on the type of investments they are making.

If you're new to investing, the good news is that mutual fund investment for beginners is simpler today than ever before, especially among the many online platforms.

Step 1: Know Your Financial Goal

The first step in how to start investing in mutual funds is identifying why you want to invest. Are you saving for a short-term goal like a holiday? Or something long-term like your child's education or your retirement?

Clear goals help you decide the right type of mutual fund — whether you need a safer option or are ready to take some risk for better returns.

Step 2: Get Your Basics Ready

Before starting the mutual fund investment process, make sure you have a few essential things ready. You will require a PAN Card, an Aadhaar Card linked to your mobile number, a bank account with internet banking or UPI access, and an active mobile number and email ID. These are important because you will have to complete your KYC (Know Your Customer) verification, which is compulsory before making any investment. Having these documents handy will make the process smoother and faster.

Step 3: Complete Your KYC Online

Today, doing KYC is super simple. You can complete it online through your smartphone or computer by uploading your documents and completing a quick video verification. This step is crucial for your mutual fund investment process and usually takes less than 10 minutes.

Step 4: Choose How You Want to Invest

You can invest in mutual funds either as a lump sum (one-time investment) or through SIP (Systematic Investment Plan), where a small amount is invested every month. For mutual fund investment for beginners, SIPs are highly recommended because they help build a habit of regular investing without putting pressure on your wallet.

Step 5: How to Pick Mutual Funds

One of the biggest doubts for beginners is how to pick mutual funds. Here's how you can make it simple:

Look for funds that match your financial goals and the time you can stay invested.
Understand the level of risk you are comfortable with.
Check the fund's past performance — but remember, past results don't guarantee future returns.
Look at the fund manager's experience and reputation.
Keep it simple. Start with basic funds before exploring more complex ones.

Starting with balanced or large-cap funds is often a safer choice for new investors.

Step 6: Start Investing Online

Once you have picked the mutual fund you want to invest in, the rest is easy. You can invest online by:

Logging into a reliable platform.
Selecting the fund and investment amount.
Choosing SIP or lump sum.
Make payment through your bank account or UPI.

Within minutes, your investment is done!

Step 7: How to Track Mutual Fund Investments

Once you have made your investment, it's important to know how to track mutual fund investments regularly. Most online platforms and apps send you updates about your fund's performance. Ideally, you should check your investments once a month to stay informed without getting too affected by short-term market movements. Keeping an eye on your portfolio helps you make sure your investments are aligned with your financial goals.

However, avoid checking them daily, as mutual funds are meant to be long-term investments, and daily market changes can be misleading.

Conclusion

Starting your mutual fund journey online is no longer complicated. With a little planning, understanding how to start investing in mutual funds becomes a simple process that can set you up for financial success. Remember to take small steps, track your progress, and stay patient.

If you are looking for a trusted platform to begin your mutual fund investment for beginners, Indiabulls Securities Limited offers a smooth and user-friendly experience for your investment journey. Their platform is designed to make the mutual fund investment process simple, quick, and accessible for everyone.

FAQs

How much money do I need to start investing in mutual funds?

You can start investing with as little as ₹100 per month through SIPs. It's affordable and flexible for beginners.

Is it safe to invest in mutual funds online?

Yes, as long as you use trusted and secure platforms and ensure you are completing transactions through verified websites or apps.

Should I invest in multiple mutual funds at once?

It's better to start with one or two funds. As you get more comfortable, you can diversify further.

Disclaimer: The contents herein are only for information and do not amount to an offer, invitation or solicitation to buy or sell securities or any other financial product offered by Indiabulls Securities Limited (formerly Dhani Stocks Limited / DSL). The content mentioned herein is subject to updation, completion, amendment without notice and is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would be contrary to law or would subject Indiabulls Securities Ltd. (formerly Dhani Stocks Ltd. / DSL) to any licensing or registration requirements. No content mentioned herein is intended to constitute any investment advice or opinion. ISL disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein. This blog is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made about its accuracy or its completeness is guaranteed. This content mentioned in this blog is solely for informational purpose and shall not be used and/or considered as an offer or invitation or solicitation to buy or sell securities or other financial instruments. ISL will not treat recipients as customers by virtue of their receiving this report. The securities / Mutual Fund units (if any) discussed and opinions expressed in this blog/report may not be suitable for all investors. Such investors must make their own investment decisions, based on their investment objectives, financial positions and specific needs. ISL accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. ISL may have issued other blogs that are inconsistent with and reach different conclusion from the information presented in this blog.

Indiabulls Securities Limited (formerly Dhani Stocks Limited) is a Mutual Fund Distributor registered with ‘Association of Mutual Fund of India’ (AMFI) vide ARN number ARN-160411. Corporate Identification Number: U74999DL2003PLC122874; Registered office address: 1/1E, First Floor, East Patel Nagar, New Delhi - 110008. Tel.: 011-41052775, Fax: 011-42137986.; Correspondence office address: Plot no. 108, 5th Floor, IT Park, Udyog Vihar, Phase - I, Gurugram - 122016, Haryana. Tel: 022-61446300. Email: helpdesk@dhani.com