February 23, 2024
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KYC for Mutual Fund: How to Apply


Mutual fund investments are in trend these days. These modern financial tools have gained popularity among both new age investors as well as seasoned investors because they are ideal for investment planning. Mutual funds are considered to be way better than traditional investment tools as they hold the potential to offer investors with far better returns. Of course, there is a certain amount of risk involved with mutual funds as these funds invest predominantly in equity and equity related instruments, along with other money market instruments. But, this is also the reason behind its potential to offer higher returnstoo.

Tempted to invest in mutual funds? But did you know that in order to invest in mutual funds, you need first to get your KYC sorted? KYC for mutual funds is mandatory, and one cannot invest in mutual funds without completing the KYC process.

KYC or know your customer is the basic account opening process adopted by all AMCs and fund houses. It mostly entails of documents like a person’s address proof, identity proof, etc. supported by a few other documents.

There are two components of KYC; they are listed below:

  • The first component consists of the fundamentals and standard KYC information as defined by the Central KYC registry that shall be used every financial institution
  • The financial mediators might need the second component for supplementary KYC information; these may consist of mutual funds, depository participants, stock brokers, etc.

Documents for KYC

To start with the KYC procedure, you need first to download the KYC form from the AMC or visit the fund house in person and collect the KYC form there. Then you need to carefully fill in all the necessary details and support this form with a series of self-attested documents. While getting your documents verified in person, it is necessary that you carry original documents along with self-attested photocopies. KYC documents include:

  • Permanent Account Number (PAN) Card
  • Identity proof
  • Address proof
  • Passport size Photograph
  • AADHAR Card

As per the rules and regulations of the Government of India, proofs like –

  • voter ID, 
  • passport
  •  PAN Card, 
  • driving license, 
  • NREGA job card, 
  • AADHAR Card

 If you have more than one of the above mentioned documents with address, they can be used as address proofs too. 

Apart from the above mentioned documents, you can also submit proofs like utility bills, bank statements in order to process your KYC verification. This KYC verification is a one-time thing and can be completed either online or offline. Once you are done with your KYC verification, you may begin investing in mutual funds.
Understanding eKYC

eKYC is nothing but the paperless procedure of getting your KYC verification sorted. eKYC is actually easy and hassle free electronic verification process which can be initiated using a soft copy of all the necessary documents, thus refraining the use of paper. When you opt for eKYC, you allow self-authorization to the Unique Identification Authority of India (UIDAI) to use your Aadhar Card for the verification procedure. Such self-authorization also permits fund houses from accessing all your information including name, age, birth, residential address, thumb impressions and eye retina, basically, everything that you submitted while getting your AADHAR card done.

However, if you opt for eKYC through AADHAR card, you are only allowed to invest up to Rs. 50,000 per month with one AMC. If you wish to increase your investment limit, it is advisable to get your KYC verification done in person. 

It is mandatory for all AMCs to update their customer identification process as per the guidelines issued by the Securities and Exchange Board of India (SEBI). If you wish to increase your chances of making higher profits, get your KYC sorted soon and start investing in mutual funds.