If you are a new mutual fund investor, one of the things that you need to do is the KYC procedure. Also known as the Know Your Customer (KYC) norms, the purpose of a KYC is to capture key information about an investor.
In most cases, as a new investor, you are required to complete an Aadhar based eKYC.
The reason is simple.
It is fast and instant. All you need to do is input your Name, PAN and Aadhar number. No address proof, ID proof, etc.
You will receive an OTP on the mobile number registered with Aadhar. You e-sign using this OTP.
That’s it. In less than 5 minutes, you are ready to invest online using the Aadhar based eKYC.
Where can you do this eKYC?
You can get your eKYC done with any of the registrars such as CAMS, Karvy, Sundaram BNP or Franklin. Almost every fund house too has an eKYC facility for investing online. Some popular investment websites too provide this facility.
However, these service providers may expect you to invest in their fund. So far, Quantum Mutual Fund does not insist on an investment. So, you can use their website for doing your eKYC.
The limitation of this Aadhar based eKYC is that you can can invest only Rs. 50,000 per mutual fund per financial year.
Please note this is the investment limit and not the market value limit. Also, the limit is per fund house and not per fund scheme. Every year you can invest Rs. 50,000 each with HDFC, Quantum, Aditya Birla, UTI, etc. in any of their schemes.
So, if you are choosing 4 mutual funds, you can effectively invest upto Rs. 2 lakhs in a year.
So far, so good.
What if you want to invest more than Rs. 50,000?
So, the problem arises when you have to invest more than Rs. 50,000 in a mutual fund in a year. In that case, you have to undergo a full KYC.
The difference between Aadhar based eKYC and Full KYC is the additional details required. These details are:
- Identify proof
- Address proof
- FATCA Details
- In Person Verification
Of the above, the last one is the most important step. You need a SEBI authorised intermediary to verify the relevant details of your KYC application as well as your identity, in person.
This full KYC can be done via submitting an offline form or even online.
In fact the online process is so much more easier to do. You don’t have to submit any forms or run to any office. Sitting in the comfort of your home or office, you can complete the process online on your computer.
I have written another detailed post on doing your Central KYC application process online. Click here to read the post.
Once you submit your application along with relevant information, the full KYC process takes about 2 weeks to process. You will receive an update on your email ID as well as mobile number.
With Full KYC, you can invest any amount in any mutual fund scheme.
You don’t have to share the fact that you are KYC compliant. The PAN that you mention in your investment application checks automatically if you are compliant or not.
So, go ahead and get yourself KYC compliant and invest hassle free in mutual funds.
Even after getting KIN (CKYC identifier number), my earlier KYC is not being updated. The CKYC was done by Karvy, but CAMS is not updating the same.
As long as it is updated in one place, it is fine. Are you facing any issue because of this?
Hi Vipin, is this limit per calendar year or per financial year?
This used to per fund house limit. Now, full KYC is compulsory for all investments starting with Re 1.
Thanks for your reply.
As I noticed in my case, with e-KYC, I could invest upto 50,000/- per financial year per AMC (or fund house) . Beyond that amount, transactions would be cancelled.
I recently did the conversion from e-KYC to full KYC. The e-KYC was earlier done with CAMS. To convert to full KYC, I didn’t have to visit the CAMS office which was far from my residence. Instead, I approached the nearest branch office of HDFC Mutual Fund in which I have some holdings. It was a relatively simple procedure requiring the photocopies of Aadhaar & PAN. On the fifth day, the conversion happened, and cvlkra.com started showing the status as ‘Normal’ and IPV Flag as ‘Y’.
Overall, it was a smooth process.
Thanks for your help.
Good to know