Invest in Mutual Funds
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A mutual fund is a type of investment instrument that combines investors’ funds to invest in securities such as stocks, bonds, money market instruments, and other assets. Professional fund managers manage your portfolio by allocating the assets and generating capital gains or income. Mutual funds are classified into Fixed Income or debt mutual funds, equity mutual funds and hybrid mutual Funds.

Yes, you need to open a demat account to buy mutual funds on 5paisa. With a demat account, you can experience the convenience of investing and managing your portfolio anywhere and at any time.

With 5paisa you can open two types of accounts – An All-in-one Account & Mutual Fund Account

Both the accounts have basic KYC document requirements like –

 

• Pan Card
• Aadhar Card
• Bank details
• Signature (in digital form)
   

Check the entire list of documents required to open an account with 5paisa

You can easily add or update nominee details online with 5paisa, either through the mobile app or the website.
To update nominee details using the mobile app, log in and tap the 'User' icon at the bottom of the screen, then tap your name at the top left to access your profile. Go to the 'Manage' section and select 'Nominee Details.' From there, you can add or update your nominee information. Once done, complete the e-sign process to confirm the changes.
If you're using the 5paisa website, log in to your account and click the profile icon at the top right. Select 'Profile' from the dropdown and navigate to the 'Nominee Details' section. Click on 'Add/Update Nominee,' fill in the necessary information, and complete the e-sign process to finalize the update.

To choose the best mutual funds that is aligned to your goals, consider the following factors before you buy mutual funds online:  

 

• Investment Objectives: Your investment’s goal. 
• Risk: Understand your risk appetite and how risky your fund is.
• Fund Performance: Verify that your fund has delivered consistent returns.
• Expense Ratio: The percentage of your investment fund house levied by the fund company is known as the expense ratio.
   

Professional money or fund managers manage mutual funds at 5paisa. They pool the money invested in the same instrument by other investors and invest it on your behalf into various asset classes. They make investments based on the scheme’s objectives and decide when to buy or sell a specific security expertly.

• Performance consistency
• The fund manager’s background
• The reputation of the AMC you’ve picked.
• The distribution of assets

Yes, mutual funds can be profitable. However, selecting an appropriate fund and investing for the long term is crucial. To select the best fund and monitor your progress over time, you can utilise our mutual fund calculator.

Except for some retirement funds and ELSS (equity-linked savings plans, often known as tax-saving funds), mutual funds are not tax-free. The gains are taxed according to the holding period as short-term and long-term capital gains.

Factors to consider are your risk appetite, investment goals, financial goals, fund manager expertise, investment duration, past performance and how your investments will be taxed. It is also important to understand the type of mutual fund (equity, debt, hybrid) you’re investing in and prepare an investment strategy before investing.

No, according to SEBI and CSDL guidelines, you can’t add another investor to your existing account. However, you can open a joint demat account with up to three account holders (one main holder + 2 joint holders) at the time of opening your account with us.

Offsetting capital gains is one of the most efficient ways to reduce your tax liability on both short and long-term capital gains. Here, long-term or short-term losses are used to reduce your overall returns, which reduces your tax liability.

For example, if you have invested ₹3 lakhs in mutual funds on 1st January 2024 and your investment decreases to ₹2.6 lakhs on 4th March 2025, your long term capital loss will be ₹40,000 in redemption.

This can now be offset by any gains you book in the same year. So, if you get long-term capital gains of ₹1.67 lakhs (₹42,000 over the exemption limit) from another mutual fund, your tax payable will be ₹250.

Here is the calculation –
Long Term Capital Gains: ₹40,000 - ₹42,000 = ₹2,000 

Long Term Capital Gain Tax = 12.5% of ₹2,000 = ₹250

With 5paisa, you can start your investments as low as ₹100. The minimum investment amount required for SIP investments is ₹500, and for lump sum investments, it is ₹100. 

Yes, NRIs can invest in mutual funds through 5paisa by providing updated KYC and NRE/NRO bank account details. We also support direct investments or through a Power of Attorney (PoA).

We follow the standard industry cut-off times: 3 PM for liquid funds and 7:00 PM for overnight funds. Transactions made after these times are processed with the next business day’s NAV. Always confirm specific cut-off times on the platform.

We support all major banks for NET banking transactions. Some of the popularly supported banks include HDFC Bank, ICICI Bank, SBI, Axis Bank and Kotak Mahindra Bank. Check our website for a complete list of supported banks.

SIP, or Systematic Investment Plan, is investing in your chosen mutual fund scheme at regular intervals, such as monthly or yearly. It helps you create a disciplined investment strategy by investing a pre-set amount of money on a fixed date.

On 5paisa,  you can choose any date for your SIP from the 1st to the end of the month according to your cash flow. The dates typically chosen are 1st, 7th or 25th – but you can choose a date that aligns with your schedule.

Yes, one can redeem their mutual fund units to withdraw their investments at any point of time. However the redemption cycle varies depending on the type of fund that you are withdrawing from. Liquid funds run on a T+1 cycle while equity MFs have a T+2 to T+3 cycle. 

It is extremely simple to invest in mutual funds on 5paisa app. All you need to do is open the app, head over to the mutual fund section, select the appropriate mutual fund that is aligned with your investment goals and invest the sum that you have decided, or start an SIP – whatever you choose.

The primary difference between direct and regular mutual funds is the cost of investing, which stems from how you buy the units. While both plans invest in the same underlying assets and are managed by the same fund manager, direct plans are generally more cost-effective for independent investors.