Category: Mutual Funds Facts

Life is unpredictable, especially for self-employed individuals and small business owners. There may be times when cash flow gets tight, and continuing your SIP feels like a burden. The good news is that you can stop or pause your SIP temporarily without losing your existing investments. This guide explains how to do it and what to consider before making this decision.

Can You Actually Pause a SIP?

Yes, most mutual fund houses and investment platforms allow you to pause your SIP for a specified period. The terminology varies — some call it “SIP Pause,” others call it “SIP Holiday” or “SIP Suspension.” The concept is the same: your monthly SIP debits are temporarily stopped, and they resume automatically after the pause period ends.

Alternatively, you can cancel your SIP entirely and start a new one later when you are ready.

Pause vs Cancel: Understanding the Difference

• SIP Pause: Your SIP is temporarily suspended for a defined period (usually 1-6 months). After the pause period, the SIP resumes automatically. Your existing investment remains untouched.
• SIP Cancellation: Your SIP is permanently stopped. To restart, you will need to set up a new SIP with a new mandate. Your existing investment is not affected — only future instalments stop.

In both cases, your existing mutual fund units remain invested and continue to grow (or decline) based on market performance.

How to Pause Your SIP

Through Your Investment App (like Bachatt)

1. Open the app and navigate to your SIP section
2. Select the SIP you want to pause
3. Look for the “Pause SIP” or “SIP Holiday” option
4. Choose the duration of the pause (1 month, 3 months, 6 months, etc.)
5. Confirm the pause
6. Your SIP will automatically resume after the pause period

Through the AMC Website

1. Log in to the AMC’s online portal
2. Go to “SIP Management” or “Transactions”
3. Select the SIP to pause
4. Choose the pause period and submit

Note: Not all AMCs offer an online SIP pause facility. Some may require a written request or form submission.

How to Cancel Your SIP

Online Method

1. Log in to your investment app or AMC portal
2. Go to the SIP section
3. Select the SIP to cancel
4. Click “Cancel SIP” or “Stop SIP”
5. Confirm the cancellation

Important: Submit the cancellation request at least 15-20 days before your next SIP date. Processing takes time, and a late request may not prevent the next debit.

Through Your Bank

If you set up your SIP through a NACH mandate, you can also cancel the mandate through your bank’s net banking portal. However, it is better to cancel through the AMC or app to ensure proper records.

What Happens to Your Existing Investment?

This is the most important point to understand: pausing or cancelling a SIP only stops future instalments. Your existing mutual fund units remain invested. They continue to participate in market movements and generate returns (or losses).

You do not lose anything by pausing or cancelling a SIP. Your money stays in the fund until you explicitly redeem it.

When Should You Consider Pausing Your SIP?

• Temporary cash crunch: If your business is going through a lean period and you need cash for operations
• Medical emergency: When unexpected expenses arise
• Job loss or income disruption: When regular income is interrupted
• Major life event: Wedding, home purchase, or other big expenses

Pausing is a better option than redeeming your existing investments prematurely, especially if your equity funds have not yet completed a full market cycle.

When Should You NOT Pause Your SIP?

• Market crash: This is the worst time to pause. When markets are down, your SIP buys more units at lower prices — this is the best time to invest!
• Fear of short-term losses: SIPs are for the long term. Short-term drops are normal and expected.
• Following news headlines: Media often exaggerates market movements. Do not let news drive your SIP decisions.

Tips for Managing SIP During Tough Times

• Reduce instead of stopping: If ₹10,000 per month is too much, reduce to ₹2,000 or even ₹500. Maintaining the investing habit matters more than the amount.
• Pause the largest SIP first: If you have multiple SIPs, pause the one with the highest amount and continue the smaller ones.
• Set a resume date: When pausing, commit to a specific date to restart. Without a plan, temporary pauses often become permanent stops.
• Restart as soon as possible: Every month of missed SIP is a missed opportunity for compounding. Resume your SIP the moment your financial situation stabilizes.

How to Restart a Cancelled SIP

If you cancelled your SIP and want to restart:

1. Log in to your investment app or AMC portal
2. Navigate to the fund in which you want to restart the SIP
3. Set up a new SIP with your desired amount and date
4. Create a new auto-debit mandate (UPI or NACH)
5. Confirm and start

The new SIP will add units to your existing folio, so you do not need to create a new account or folio.

Manage Your SIPs Flexibly with Bachatt

Bachatt understands that life is not always predictable, especially for India’s self-employed. Our app lets you pause, reduce, increase, or cancel your SIPs with just a few taps. No calls to customer support, no forms to fill. When you are ready to restart, setting up a new SIP takes under a minute.

Download the Bachatt app for complete flexibility over your mutual fund SIPs. Invest on your terms, at your pace.

Adding a nominee to your mutual fund investments is one of the most important yet overlooked steps in financial planning. A nominee ensures that your mutual fund investments are smoothly transferred to your loved ones in case of an unfortunate event. This guide explains how to add a nominee to your mutual fund investments, both online and offline.

What Is a Nominee in Mutual Funds?

A nominee is the person who is authorized to receive your mutual fund investments in the event of your death. The nominee acts as a custodian of the assets and can either claim the investments or transfer them to the legal heirs as per the will or succession laws.

Important: A nominee is not the same as a legal heir. A nominee is simply the person authorized to receive the assets from the fund house. The actual ownership is determined by the investor’s will or applicable succession laws.

Why Is Adding a Nominee Important?

• Hassle-free claim process: Without a nominee, your family will need to go through a lengthy legal process (including obtaining a succession certificate or probate) to claim the mutual fund investments.
• Quick settlement: With a nominee on record, the fund house can process the claim much faster.
• SEBI mandate: SEBI has made it mandatory for mutual fund investors to either nominate someone or explicitly opt out of nomination. Failing to do so can freeze your folio for new transactions.
• Peace of mind: Knowing your investments will reach your family without bureaucratic hurdles is invaluable.

How to Add a Nominee Online

Through Your Investment App (like Bachatt)

1. Open the app and go to your profile or account settings
2. Look for the “Nomination” or “Nominee” section
3. Click on “Add Nominee”
4. Enter the nominee’s details: full name, relationship, date of birth, and address
5. If adding multiple nominees, specify the percentage share for each (total must equal 100%)
6. Verify with OTP or e-sign
7. The nomination is updated across all your folios on the platform

Through the AMC Website

1. Log in to the AMC website where you have investments
2. Navigate to the “Service Requests” or “Nomination” section
3. Select the folio for which you want to add a nominee
4. Fill in the nominee details
5. Authenticate with OTP and submit

Note: You may need to repeat this for each AMC if you have investments across multiple fund houses.

Through MF Central

1. Log in to mfcentral.com
2. Go to “Service Requests” and select “Nomination”
3. Select folios and add nominee details
4. Authenticate and submit

How to Add a Nominee Offline

If you prefer the physical route:

1. Download the Nomination Form from the AMC’s website or collect it from a CAMS/KFintech service centre
2. Fill in your folio number and nominee details
3. Sign the form (all holders must sign for joint holdings)
4. Submit at the AMC office or nearest CAMS/KFintech service centre
5. Carry an ID proof for verification

Key Rules About Mutual Fund Nomination

• Maximum 3 nominees: You can nominate up to 3 people for a single folio
• Percentage allocation: When adding multiple nominees, you must specify the percentage share for each. The total must equal 100%.
• Minor nominee: You can nominate a minor, but you must also appoint a guardian who will manage the investments until the minor turns 18.
• Joint holdings: In case of joint holdings, the nomination is effective only after the death of all holders.
• Changing nominees: You can change or update your nominee at any time. The latest nomination supersedes all previous ones.
• Opt-out: If you do not wish to nominate anyone, you must submit a written declaration opting out of nomination.

What Happens When a Nominee Makes a Claim?

When the investor passes away, the nominee needs to:

1. Submit a claim form to the mutual fund house
2. Provide the original or attested copy of the death certificate
3. Submit KYC documents of the nominee
4. Provide bank details of the nominee for the payout

The fund house typically processes the claim within 30 days of receiving all necessary documents. The nominee can choose to either redeem the units (get cash) or transfer the units to their own folio.

SEBI’s Recent Push on Nomination

SEBI has been actively pushing for mandatory nomination. Recent regulations require that:

• All existing folios must have a nominee or an opt-out declaration
• New folios cannot be opened without specifying nomination preference
• Non-compliant folios may face restrictions on new transactions

If you have old folios without nominees, update them as soon as possible to avoid any disruptions.

Secure Your Family’s Future with Bachatt

Bachatt makes adding a nominee quick and seamless. Update your nomination details in the app in just a few taps, and ensure your mutual fund investments are protected for your loved ones. We also send reminders if your nomination details are incomplete or missing.

Download the Bachatt app and add a nominee to your mutual fund investments today. It takes less than 2 minutes but makes a world of difference for your family.

If you started investing in mutual funds through a bank, broker, or distributor, chances are you are in a Regular plan. Regular plans have higher expense ratios because they include distributor commissions. Switching to a Direct plan can save you significant money over the long term. This guide explains how to transfer your mutual funds from regular to direct plan.

What Is the Difference Between Regular and Direct Plans?

Every mutual fund scheme in India is available in two variants:

• Regular plan: Includes a distributor commission (typically 0.5% to 1.5% per year) built into the expense ratio. You invest through a broker, bank, or distributor.
• Direct plan: No distributor commission. You invest directly with the AMC or through platforms like Bachatt. The expense ratio is lower.

Both plans invest in the exact same portfolio managed by the same fund manager. The only difference is the expense ratio — and over time, this difference compounds significantly.

How Much Can You Save by Switching to Direct?

Let us look at a concrete example. Suppose you have ₹10 lakh invested and the expense ratio difference between regular and direct is 0.75%:

• Over 10 years: You save approximately ₹1.2 lakh
• Over 20 years: You save approximately ₹4.5 lakh
• Over 30 years: You save approximately ₹12 lakh

That is ₹12 lakh saved on a ₹10 lakh investment — just by being in the direct plan. The savings are even larger when you continue adding money through SIPs.

How to Transfer from Regular to Direct Plan

Unfortunately, there is no simple “convert” button. A transfer from regular to direct is treated as a redemption from the regular plan and a fresh purchase in the direct plan. Here is the process:

Method 1: Switch Within the Same AMC

If you want to stay with the same fund house (e.g., move from HDFC Large Cap Regular to HDFC Large Cap Direct):

1. Log in to the AMC website or an investment app that offers direct plans (like Bachatt)
2. Select your regular plan holding
3. Choose “Switch” as the transaction type
4. Select the Direct plan of the same scheme as the target
5. Enter the amount or units to switch (partial or full)
6. Confirm the transaction

The switch will be processed at the applicable NAV, typically within 1-3 business days.

Method 2: Redeem and Reinvest

If the AMC does not support a direct switch or if you want to move to a different AMC’s fund:

1. Redeem your units from the regular plan
2. Wait for the proceeds to reach your bank account (1-3 business days)
3. Invest the amount in the direct plan through a direct platform or the AMC website

Important Considerations Before Switching

Tax Implications

Since a switch is treated as redemption + purchase, capital gains tax will apply:

• Equity funds held less than 1 year: Short-term capital gains taxed at 20%
• Equity funds held more than 1 year: Long-term capital gains above ₹1.25 lakh taxed at 12.5%
• Debt funds: Gains taxed at your income tax slab rate

Calculate the tax impact before switching. If you have large unrealized gains, consider switching in phases across financial years to utilize the ₹1.25 lakh LTCG exemption each year.

Exit Load

If you have not completed the exit load period (usually 1 year for equity funds), you will pay exit load on the switch. Check your fund’s exit load policy before proceeding.

ELSS Lock-In

If your regular plan investment is in an ELSS fund, you cannot switch until the 3-year lock-in period for each instalment is complete.

What About Your Existing SIPs?

Switching your existing units does not affect your running SIP. You need to separately:

1. Cancel your SIP in the regular plan
2. Start a new SIP in the direct plan through a direct platform

Make sure the new SIP is set up and the first instalment is processed before cancelling the old one, so there is no gap in your investing.

Platforms for Direct Plan Investment

You can invest in direct plans through:

• Investment apps like Bachatt: The easiest option with full portfolio tracking
• AMC websites: Direct access but limited to one fund house
• MF Central / MF Utilities: Government-backed platforms for direct plans

Step-by-Step Strategy for Switching

1. List all your regular plan holdings with invested amounts, current values, and holding periods
2. Calculate potential tax on gains for each holding
3. Check exit loads for each fund
4. Switch holdings with no exit load first
5. For high-gain holdings, switch in phases across financial years to optimize tax
6. Set up new SIPs in direct plans immediately
7. Cancel old SIPs in regular plans once direct SIPs are running

Switch to Direct Plans with Bachatt

Bachatt makes the transition from regular to direct plans smooth and hassle-free. Our app identifies your regular plan holdings, calculates the tax impact of switching, and helps you move to direct plans systematically. Start saving on unnecessary commissions today.

Download the Bachatt app and make the switch to direct plans — keep more of your returns where they belong, in your pocket.

Tax season does not have to be stressful. ELSS (Equity Linked Savings Scheme) mutual funds offer one of the smartest ways to save tax while simultaneously building wealth. If you have been wondering how to invest in ELSS mutual funds for tax saving, this guide covers everything you need to know.

What Are ELSS Mutual Funds?

ELSS is a category of equity mutual funds that qualifies for tax deduction under Section 80C of the Income Tax Act. You can claim a deduction of up to ₹1.5 lakh per financial year on your ELSS investments, potentially saving up to ₹46,800 in taxes (for those in the 30% tax bracket plus cess).

ELSS funds invest primarily in stocks, which means they offer the potential for higher returns compared to other 80C options like PPF, NSC, or tax-saving fixed deposits.

Why Choose ELSS Over Other 80C Options?

• Shortest lock-in: ELSS has a 3-year lock-in period — the shortest among all Section 80C investments. PPF locks your money for 15 years, NSC for 5 years.
• Higher return potential: Being equity-based, ELSS has historically delivered 12-15% average annual returns over long periods, compared to 7-8% from PPF or NSC.
• Low minimum investment: Start with as little as ₹500 through SIP.
• Dual benefit: You save tax today and build wealth for tomorrow.

How to Invest in ELSS: Step-by-Step

Step 1: Ensure Your KYC Is Complete

You need a valid KYC to invest in any mutual fund. If you have not done it yet, complete it online through an app like Bachatt — it takes under 10 minutes with PAN and Aadhaar.

Step 2: Choose an ELSS Fund

There are around 40 ELSS schemes in India. When selecting one, consider:

• Track record: Look at 3-year and 5-year returns. Consistency matters more than one-year performance.
• Expense ratio: Lower expense ratio means more of your returns stay with you. Direct plans have lower expenses than regular plans.
• Fund size (AUM): Very small funds may face liquidity issues. Very large funds may find it hard to outperform.
• Fund manager experience: A seasoned fund manager with a good track record adds confidence.

Step 3: Decide Between SIP and Lump Sum

SIP in ELSS: Invest ₹12,500 per month to maximize the ₹1.5 lakh annual limit. Benefits include rupee cost averaging and no last-minute tax planning rush. Each monthly instalment has its own 3-year lock-in, so units start maturing one by one after 3 years.

Lump sum in ELSS: Invest the entire ₹1.5 lakh at once. Good if you receive a bonus or have surplus cash. The entire amount is locked for 3 years from the investment date.

For most people, a monthly SIP is the better approach — it spreads risk and builds discipline.

Step 4: Invest Through Your Preferred Platform

You can invest in ELSS through:

• Investment apps like Bachatt: Easiest option. Select an ELSS fund, enter amount, and invest.
• AMC websites: Go directly to the fund house’s website.
• Banks and brokers: Available but usually offer regular plans (higher expense ratio).

Step 5: Claim Your Tax Deduction

When filing your income tax return:

1. Include your ELSS investment amount under Section 80C deductions
2. Keep your investment statement handy as proof
3. The deduction is available in the financial year in which you made the investment

Understanding the Lock-In Period

The 3-year lock-in is per instalment, not per SIP. This means:

• Your January 2024 SIP instalment unlocks in January 2027
• Your February 2024 instalment unlocks in February 2027
• And so on for each monthly instalment

After the lock-in expires, you are free to redeem or stay invested. There is no compulsion to withdraw — and staying invested beyond 3 years often yields better returns.

Tax on ELSS Returns

While the investment saves you tax, the returns are also tax-friendly:

• Long-term capital gains (LTCG): Gains up to ₹1.25 lakh per financial year are completely tax-free
• LTCG above ₹1.25 lakh: Taxed at 12.5%
• This applies when you redeem after the 3-year lock-in

Compare this to FD interest, which is taxed at your full slab rate (up to 30%). ELSS is clearly more tax-efficient.

ELSS Under the New Tax Regime

A critical point: Section 80C deductions, including ELSS, are only available under the Old Tax Regime. If you have opted for the New Tax Regime, you cannot claim the ELSS deduction. Evaluate which regime is more beneficial for you before investing.

Common Mistakes to Avoid

• Investing only for tax saving: Choose a good fund, not just any ELSS. A poorly performing ELSS negates the tax benefit.
• Redeeming immediately after lock-in: If you do not need the money, let it grow. Compounding rewards patience.
• Last-minute investing: Avoid cramming ₹1.5 lakh into ELSS in March. Start a SIP in April for stress-free tax planning.

Save Tax Smartly with Bachatt

Bachatt helps you choose the best ELSS fund for your profile and set up a tax-saving SIP in minutes. Our app reminds you about your 80C limit, tracks your ELSS investments, and ensures your tax planning is sorted well before March.

Download the Bachatt app and start your ELSS SIP today — save tax while building long-term wealth.

KYC (Know Your Customer) is the mandatory first step before you can invest in any mutual fund in India. It is a one-time process regulated by SEBI, and once completed, your KYC is valid across all fund houses. This guide explains how to complete KYC for mutual fund investment, covering both online and offline methods.

What Is KYC and Why Is It Required?

KYC is an identity verification process that financial institutions must perform to prevent fraud, money laundering, and other financial crimes. SEBI mandates that every mutual fund investor must be KYC-compliant before making any investment.

The good news is that KYC is a one-time process. Once you complete it with one entity — whether a mutual fund, a bank, or a broker — your KYC status is valid across the entire financial system.

Documents Required for KYC

Keep these documents ready before starting your KYC process:

• PAN card: Mandatory for all mutual fund investments above ₹50,000 (and recommended even for smaller amounts)
• Aadhaar card: For identity and address verification
• Passport-size photograph: Recent photo (digital copy for online KYC)
• Bank account details: Account number, IFSC code, bank name
• Address proof: Aadhaar usually suffices. Alternatives include passport, voter ID, or utility bill
• Mobile number: Linked to your Aadhaar (for OTP-based e-KYC)

Method 1: Online KYC (e-KYC) — The Fastest Way

Online KYC, also called e-KYC, is the most convenient method and can be completed in under 10 minutes.

Through an Investment App (like Bachatt)

1. Download the app and create your account
2. Start KYC: The app will guide you through the process step by step
3. Enter PAN details: Your PAN is verified instantly against the income tax database
4. Aadhaar verification: Enter your Aadhaar number and verify with OTP sent to your Aadhaar-linked mobile
5. Selfie/Photo: Take a live selfie for identity matching
6. Bank verification: Add your bank account — some apps verify through a penny drop (a small test transaction)
7. E-sign: Digitally sign the KYC form using Aadhaar OTP
8. Done! Your KYC is typically processed within 24-48 hours

Through KRA Websites

You can also complete e-KYC directly through SEBI-registered KYC Registration Agencies (KRAs):

• CAMS KRA: camskra.com
• KFintech KRA: krainfo.kfintech.com
• CVL KRA: cvlkra.com

Method 2: In-Person KYC (Offline)

If you prefer the traditional route or face issues with e-KYC:

1. Download the KYC form from any KRA or AMC website
2. Fill in your details: Personal information, address, bank account, etc.
3. Attach documents: Self-attested copies of PAN, Aadhaar, and photograph
4. Submit at: Any mutual fund office, CAMS service centre, KFintech office, or authorized Point of Service
5. In-Person Verification (IPV): An authorized person will verify your identity in person
6. Processing: Takes 5-10 business days

How to Check Your KYC Status

You can check if your KYC is already done by visiting:

• cvlkra.com — Enter your PAN to check KYC status
• camskra.com — KYC inquiry section
• kfintech.com — Investor KYC status check

If your status shows “KYC Compliant” or “KYC Registered,” you are ready to invest.

KYC for NRIs

NRIs can invest in mutual funds in India but have additional KYC requirements:

• Valid Indian passport or PIO/OCI card
• Overseas address proof
• NRE/NRO bank account in India
• FEMA declarations

Some fund houses accept NRI KYC online, while others require physical submission.

Common KYC Issues and Solutions

• PAN-Aadhaar not linked: SEBI requires PAN-Aadhaar linking. Link them on the income tax e-filing portal before proceeding.
• Mobile not linked to Aadhaar: Visit your nearest Aadhaar centre to update your mobile number.
• Name mismatch: Ensure your name on PAN, Aadhaar, and bank account matches exactly. Minor discrepancies can cause rejection.
• KYC shows “On Hold”: This usually means additional documents are needed. Contact the KRA or your investment platform for guidance.

KYC for Minors

Minors can also invest in mutual funds with a guardian. The guardian must be KYC-compliant, and the minor’s birth certificate or school ID is required as proof of identity.

Complete Your KYC on Bachatt in Minutes

Bachatt offers the simplest KYC experience for Indian investors. Our guided, step-by-step process takes under 10 minutes, and we handle all the backend verification so you can start investing immediately. No paperwork, no branch visits — just your PAN, Aadhaar, and a few taps.

Download the Bachatt app and complete your KYC today. Your mutual fund journey is just minutes away.

When you invest in a mutual fund, you are usually asked to choose between the Growth option and the Dividend option (now officially called IDCW — Income Distribution cum Capital Withdrawal). This choice can significantly impact your returns and tax liability. Here is a complete guide to help you understand the difference and choose the right option for your needs.

What Is the Growth Option?

In the Growth option, all the profits made by the fund are reinvested back into the fund. No payouts are made to you during the investment period. The value of your units (NAV) keeps increasing as the fund earns returns.

Example: You invest ₹1,00,000 in a fund with NAV of ₹100 (1,000 units). After a year, the fund earns 15%. Your NAV becomes ₹115. Your investment value is now ₹1,15,000. No money has been paid out to you — the entire gain is reflected in the higher NAV.

What Is the Dividend (IDCW) Option?

In the IDCW option, the fund periodically distributes a portion of its profits to investors. This could be monthly, quarterly, annually, or at irregular intervals — depending on the fund.

Important: Dividends are paid from the fund’s NAV, so after each payout, the NAV drops by the dividend amount. You are not getting “extra” money — you are getting a portion of your own investment back.

Example: Same investment as above — ₹1,00,000, NAV ₹100. The fund declares a dividend of ₹5 per unit. You receive ₹5,000 as dividend. Your NAV drops to ₹110 (instead of ₹115). Total value = ₹1,10,000 investment + ₹5,000 dividend = ₹1,15,000.

Key Differences at a Glance

Feature	Growth	IDCW (Dividend)
Payouts	None	Periodic distributions
NAV Growth	Higher (compounding)	Lower (reduced by payouts)
Tax	Only on redemption	Taxed at slab rate on each payout
Best For	Long-term wealth creation	Regular income needs

Tax Treatment: The Critical Difference

This is where the choice becomes really important:

Growth option: You pay tax only when you redeem (sell) your units. Long-term capital gains on equity funds above ₹1.25 lakh are taxed at 12.5%. If you stay invested for years, you defer the tax — which means more money stays invested and compounds.

IDCW option: Every dividend payout is taxed at your income tax slab rate (could be 20% or 30% for higher earners). Additionally, TDS of 10% is deducted if dividend exceeds ₹5,000 in a financial year. This means you lose a chunk of your returns to tax every time a dividend is paid.

For most investors, the Growth option is more tax-efficient.

When Should You Choose Growth?

• You do not need regular income from your investments
• You are investing for long-term goals (5+ years)
• You want maximum compounding benefit
• You are in a higher tax bracket (20% or 30%)
• You are doing a SIP for wealth creation

For most investors — especially those who are building wealth over time — the Growth option is the better choice.

When Should You Choose IDCW?

• You are retired and need regular income
• You have no other source of income and fall in the 0% or 5% tax bracket
• You want cash flow from your investments (though SWP is usually better for this)

A Better Alternative to IDCW: Systematic Withdrawal Plan (SWP)

If you need regular income from your mutual fund, consider using SWP with the Growth option instead of choosing IDCW. Here is why:

• SWP gives you a fixed, predictable amount every month
• Only the gains portion of each SWP withdrawal is taxed (not the principal)
• You control how much and when you withdraw
• IDCW amounts and timing are decided by the fund manager, not you

Can You Switch Between Growth and IDCW?

Yes, most fund houses allow you to switch between Growth and IDCW options of the same scheme. However, this switch is treated as a redemption and fresh purchase for tax purposes. Capital gains tax will apply on the gains in the source option.

Make the Right Choice with Bachatt

Bachatt helps you understand the impact of choosing Growth vs IDCW for your specific tax situation. Our app defaults to the Growth option for wealth creation goals and clearly explains when IDCW might make sense. Invest with clarity and confidence.

Download the Bachatt app and start investing in mutual funds with the right strategy for your goals.

The biggest advantage of a SIP (Systematic Investment Plan) is that it automates your investing. But for true automation, you need to set up an auto-debit from your bank account. This ensures your SIP instalment is deducted and invested every month without you lifting a finger. Here is a complete guide on how to set up an auto-debit for your mutual fund SIP.

What Is Auto-Debit for SIP?

Auto-debit is a standing instruction to your bank to automatically transfer a fixed amount from your savings account to your mutual fund on a specific date each month. Once set up, you do not need to manually approve each SIP instalment — it happens automatically.

This eliminates the risk of missing SIP payments due to forgetfulness, busy schedules, or simply being out of town.

Auto-Debit Methods Available in India

There are three primary methods to set up auto-debit for mutual fund SIPs:

1. UPI Autopay (Most Popular)

UPI Autopay is the fastest and most convenient way to set up auto-debit. Most investment apps, including Bachatt, support this method.

How it works:

1. When you set up a SIP on the app, you will be prompted to create a UPI mandate
2. You will be redirected to your UPI app (Google Pay, PhonePe, Paytm, etc.)
3. Approve the mandate by entering your UPI PIN
4. The mandate sets the maximum amount and frequency (monthly)
5. On each SIP date, the amount is automatically debited via UPI

Advantages: Instant setup, no paperwork, easy to modify or cancel. Works with all major UPI apps.

Limit: Most UPI mandates support up to ₹1 lakh per transaction (check with your UPI app for exact limits).

2. NACH (National Automated Clearing House)

NACH is the traditional and most widely accepted method for SIP auto-debits. It is managed by NPCI (National Payments Corporation of India).

How it works:

1. You fill out a NACH mandate form (physical or e-mandate) with your bank account details
2. The form is submitted to your bank for registration
3. Bank verifies and activates the mandate (takes 15-30 days for physical, 2-3 days for e-mandate)
4. Once active, SIP debits happen automatically on the scheduled date

Advantages: Higher limits (up to ₹10 lakh or more), most reliable method, works with all banks.

Limitation: Physical NACH takes time to set up. E-NACH via Aadhaar is much faster.

3. Net Banking / OTP-Based Mandate

Some platforms allow you to set up auto-debit through net banking. You log in to your bank’s internet banking portal and approve the standing instruction.

Advantages: No paperwork, moderate setup time.

Limitation: Not all banks support this for all platforms.

Step-by-Step: Setting Up Auto-Debit on Bachatt

1. Start a new SIP: Choose your mutual fund and enter the SIP amount and date
2. Select payment method: Choose UPI Autopay for instant setup or NACH for higher limits
3. For UPI Autopay: Enter your UPI ID, approve the mandate on your UPI app with your PIN
4. For NACH: Complete the e-mandate registration with Aadhaar OTP or net banking authentication
5. Confirmation: Once the mandate is approved, your SIP is set up and will run automatically

What Happens If Auto-Debit Fails?

SIP auto-debits can fail due to:

• Insufficient balance: The most common reason. Ensure adequate funds in your account on the SIP date.
• Bank holidays: If the SIP date falls on a bank holiday, the debit is attempted on the next business day.
• Mandate expiry: NACH mandates have an expiry date. Renew before it lapses.
• Account changes: If you close or change your bank account, the mandate becomes invalid.

If a SIP instalment fails, the fund house will reattempt the debit (some do, some do not). If three consecutive instalments fail, your SIP may be automatically cancelled. Most apps will notify you when a debit fails so you can take corrective action.

Tips for Smooth Auto-Debit

• Keep sufficient balance in your account 2-3 days before the SIP date
• Choose a SIP date shortly after your usual income date
• Set up bank notifications to track SIP debits
• Periodically check that your mandate is active and has not expired
• If you have multiple SIPs, stagger the dates to avoid all debits on the same day

How to Cancel or Modify Auto-Debit

If you want to stop or change your auto-debit:

• Through the app: Cancel or pause the SIP from your investment app. The mandate will be cancelled automatically.
• Through your bank: Contact your bank to cancel the NACH mandate or revoke the UPI autopay.

Automate Your Investing with Bachatt

Bachatt makes setting up auto-debit for your SIP incredibly simple. Whether you prefer UPI Autopay for instant setup or NACH for higher investment amounts, we have got you covered. Set it once and let your wealth grow on autopilot.

Download the Bachatt app and set up your automated SIP today — investing should be effortless.

Once you have invested in mutual funds, it is important to periodically check your portfolio status to ensure your investments are on track. Fortunately, checking your mutual fund portfolio online has become incredibly easy. This guide explains all the ways you can check your mutual fund portfolio status online in India.

Why Should You Check Your Portfolio?

Regular portfolio monitoring helps you:

• Verify that your SIP instalments are being invested correctly
• Track the current value and returns of your investments
• Identify underperforming funds that may need to be replaced
• Ensure your asset allocation still matches your risk tolerance
• Plan redemptions for upcoming financial goals

However, a word of caution: avoid checking your portfolio daily. For equity mutual funds, a quarterly review is sufficient. Obsessively tracking daily NAV movements can lead to emotional decisions that hurt your long-term returns.

Method 1: Through Your Investment App

If you invested through an app like Bachatt, checking your portfolio is the easiest:

1. Open the Bachatt app
2. Navigate to the “Portfolio” or “Investments” section
3. View your complete holdings — fund names, units held, current value, invested amount, and returns
4. Tap on individual funds for detailed information including NAV history, SIP status, and gain/loss breakdown

The advantage of using an investment app is that all your mutual fund holdings across different AMCs are consolidated in one dashboard.

Method 2: Through CAMS and KFintech Statements

CAMS (Computer Age Management Services) and KFintech are the two main registrar and transfer agents for mutual funds in India. Between them, they service almost all mutual fund houses.

To get a Consolidated Account Statement (CAS):

1. Visit camsonline.com or kfintech.com
2. Go to the “Investor Services” section
3. Select “Consolidated Account Statement”
4. Enter your email ID registered with the mutual fund
5. A detailed CAS will be sent to your email within minutes

The CAS includes all your mutual fund holdings across all fund houses linked to your PAN, along with transaction history.

Method 3: Through MF Central

MF Central (mfcentral.com) is a joint initiative of CAMS and KFintech, backed by AMFI and SEBI. It provides a unified platform to view and transact across all mutual fund holdings.

1. Register on mfcentral.com using your PAN and mobile number
2. Once logged in, you can see all your mutual fund investments in one place
3. View holdings, transaction history, capital gains report, and more

Method 4: Through Individual AMC Websites

Each AMC (like SBI MF, HDFC MF, ICICI Prudential MF) has its own website where you can check your holdings:

1. Visit the AMC’s website
2. Log in with your folio number or PAN
3. View your holdings, transactions, and account statements

The limitation is that you need to log in to each AMC separately if you have investments across multiple fund houses.

Method 5: Through NSDL / CDSL Demat Account

If your mutual fund units are held in demat form, you can check them through your NSDL or CDSL account, or through your broker’s platform.

What to Look For When Checking Your Portfolio

When reviewing your portfolio, pay attention to these key metrics:

• Current value vs invested amount: This gives you the absolute gain or loss
• XIRR: Your actual annualized return, especially important for SIP investments
• Fund performance vs benchmark: Is your fund beating its benchmark index? If not, consider switching
• Asset allocation: What percentage of your portfolio is in equity, debt, and other asset classes? Does it match your intended allocation?
• SIP status: Are all your SIPs running as expected? Sometimes auto-debits fail due to insufficient balance

How Often Should You Review?

• Monthly: Verify SIP debits are happening correctly
• Quarterly: Review fund performance and compare with benchmarks
• Annually: Comprehensive review — rebalance asset allocation, replace underperformers, increase SIP amounts

Red Flags to Watch For

• A fund consistently underperforming its benchmark for 2+ years
• Frequent fund manager changes
• Very high expense ratio compared to category average
• Sudden large outflows from the fund (assets declining sharply)

Track Everything on Bachatt

Bachatt provides a comprehensive portfolio dashboard that brings all your mutual fund investments together. Track real-time values, monitor returns through XIRR, check SIP statuses, and get alerts when a fund needs attention — all in one clean, intuitive interface built for Indian investors.

Download the Bachatt app to stay on top of your mutual fund portfolio, effortlessly.

You have been running a SIP for several months or years and want to know how much you have actually earned. Calculating returns on a SIP is not as straightforward as calculating returns on a fixed deposit, because you invest different amounts at different times. This guide explains exactly how to calculate returns on your mutual fund SIP.

Why SIP Returns Are Different

When you make a lump sum investment, calculating the return is simple: compare the final value to the initial investment. But with a SIP, each monthly instalment enters the market at a different NAV and has been invested for a different duration. Your first instalment has been invested for much longer than your latest one.

This is why you cannot simply compare total invested amount to current value and call it your annual return. You need the right metric.

Three Ways to Measure SIP Returns

1. Absolute Return

This is the simplest calculation — the total percentage gain or loss on your investment.

Formula: ((Current Value – Total Amount Invested) / Total Amount Invested) × 100

Example: You invested ₹1,20,000 through SIP (₹10,000/month for 12 months). Current value is ₹1,32,000.

Absolute Return = ((1,32,000 – 1,20,000) / 1,20,000) × 100 = 10%

The limitation: this does not account for the time factor. A 10% return in 6 months is very different from 10% in 3 years.

2. CAGR (Compound Annual Growth Rate)

CAGR tells you the annualized return assuming your money grew at a steady rate. However, CAGR is designed for lump sum investments. When used for SIPs, it understates your actual return because it assumes all money was invested on day one, when in reality each SIP instalment was invested at different times.

Verdict: Do not use CAGR for SIP return calculation. It is misleading.

3. XIRR (Extended Internal Rate of Return) — The Right Method

XIRR is the most accurate way to measure SIP returns. It considers each individual cash flow (each SIP instalment) and its specific date to calculate your true annualized return.

XIRR treats each SIP instalment as a separate investment and calculates the single annual return rate that would result in your current portfolio value.

How to Calculate XIRR

Using Excel or Google Sheets

You can calculate XIRR easily in a spreadsheet:

1. In column A, list all your SIP dates
2. In column B, list the SIP amounts as negative numbers (money going out from you)
3. In the last row, add today’s date in column A and your current portfolio value as a positive number in column B
4. Use the formula: =XIRR(B1:B13, A1:A13)
5. Multiply the result by 100 to get the percentage

Example:

Suppose you invested ₹5,000 monthly from January 2024 to December 2024, and your current value in March 2025 is ₹68,500.

Your cash flows would be: -5000 on each SIP date, and +68,500 on the current date. The XIRR formula would give you your actual annualized return.

Using an Online SIP Calculator

Many websites offer free SIP return calculators. Simply enter your monthly SIP amount, start date, and current value to get your XIRR.

Using the Bachatt App

The easiest way is to check your returns directly on the Bachatt app. Your XIRR is automatically calculated and displayed for each fund and for your overall portfolio. No manual calculations needed.

Understanding Your XIRR Number

Once you have your XIRR, here is how to interpret it:

• Below 8%: Underperforming — your fund may not be suitable for long-term wealth creation
• 8-12%: Average — acceptable for debt or balanced funds
• 12-18%: Good — typical for well-performing equity funds
• Above 18%: Excellent — but verify if this is sustainable over longer periods

Remember that returns fluctuate. A SIP running for less than 3 years may show volatile XIRR. Give your equity SIP at least 5 years before judging performance.

SIP Return Estimation: What to Expect

While past returns do not guarantee future performance, here are general long-term expectations for different fund types:

• Large Cap / Index Funds: 10-13% XIRR over 10+ years
• Flexi Cap / Multi Cap: 12-15% XIRR over 10+ years
• Mid Cap / Small Cap: 13-18% XIRR over 10+ years (with higher volatility)
• Hybrid / Balanced: 9-12% XIRR over 10+ years

Tips for Better SIP Returns

• Stay invested long-term: The longer you stay, the better compounding works for you
• Increase SIP annually: A 10% step-up in SIP each year significantly boosts your final corpus
• Do not stop during market falls: Corrections help you accumulate more units at lower prices
• Review annually: Compare your fund’s XIRR with its benchmark and category average

Track Your SIP Returns on Bachatt

Stop guessing and start tracking. Bachatt automatically calculates your XIRR, absolute returns, and investment growth for every fund in your portfolio. Get a clear picture of how your money is performing with intuitive charts and dashboards.

Download the Bachatt app today and take control of your mutual fund investments.

As your financial goals evolve or market conditions change, you may want to move your money from one mutual fund scheme to another within the same fund house. This process is called switching. It is a common and useful feature, but many investors are not sure how it works. This guide explains exactly how to switch between mutual fund schemes in India.

What Is a Mutual Fund Switch?

A switch is essentially a simultaneous redemption from one scheme and reinvestment into another scheme of the same AMC (Asset Management Company). For example, you might switch from an HDFC Large Cap Fund to an HDFC Mid Cap Fund, or from a growth plan to a dividend plan within the same fund.

Unlike separately redeeming and reinvesting, a switch is processed as a single transaction, which makes it faster and more convenient.

When Should You Consider Switching?

Switching is useful in several scenarios:

• Goal alignment: Your investment goal has changed — perhaps from aggressive growth to capital preservation as you near your goal.
• Risk adjustment: You want to move from high-risk equity to lower-risk debt as retirement approaches.
• Better options: A new or different scheme within the same AMC suits your needs better.
• Plan change: You want to move from a regular plan to a direct plan (within the same AMC) for lower expenses.
• Consolidation: You want to simplify your portfolio by merging investments into fewer schemes.

How to Switch Mutual Funds Online

Through an Investment App (like Bachatt)

1. Log in to the app and navigate to your portfolio
2. Select the mutual fund scheme you want to switch from (source scheme)
3. Look for the “Switch” option
4. Choose the scheme you want to switch to (target scheme) — this must be from the same AMC
5. Enter the amount or number of units you want to switch
6. Review the details including any exit load or tax implications
7. Confirm the switch with OTP or PIN verification

Through the AMC Website

1. Log in to the fund house website with your folio credentials
2. Go to the “Transactions” or “Switch” section
3. Select the source scheme and target scheme
4. Enter the switch amount or units
5. Authenticate and submit

Through MF Central

MF Central also supports switches. Log in with your PAN and select the switch option from the transaction menu.

Important Things to Know About Switching

Tax Implications

A switch is treated as a redemption from the source scheme and a fresh purchase in the target scheme for tax purposes. This means:

• If you have gains in the source scheme, capital gains tax will apply
• Short-term gains on equity funds (held less than 1 year) are taxed at 20%
• Long-term gains on equity funds above ₹1.25 lakh are taxed at 12.5%
• For debt funds, gains are taxed at your income tax slab rate

Exit Load

If the source scheme has an exit load and you have not completed the required holding period, the exit load will be deducted from your switch amount. Always check the exit load before switching.

Processing Time

The switch typically takes 1-3 business days, depending on the fund types involved. Redemption from the source scheme happens at that day’s NAV (if before cut-off), and purchase in the target scheme happens when the redemption proceeds are available.

Switch vs Selling and Buying Separately

You might wonder why you should use the switch facility instead of redeeming and reinvesting manually. The advantages of using switch:

• Convenience: Single transaction instead of two
• Speed: The reinvestment happens automatically once redemption is processed
• No idle money: Your money is not sitting in your bank account between transactions

The limitation: you can only switch between schemes of the same AMC. To move money to a different AMC, you need to redeem and reinvest separately.

Common Switching Scenarios

• Equity to debt: When nearing your financial goal and want to protect gains
• Regular to direct plan: To reduce expenses and boost long-term returns
• Growth to IDCW (dividend): When you want regular income from your investment
• One fund to another: When a better-performing fund is available within the same AMC

Switch Smartly with Bachatt

Bachatt simplifies the switching process and shows you the tax and exit load impact before you confirm, so there are no surprises. Our platform helps you make informed decisions about when and how to switch your mutual fund investments.

Download the Bachatt app for seamless mutual fund management — from investing to switching to redemption.