InvestorQ : What is the important thing about holding mutual fund units in Demat form?
shivangi Arora made post

What is the important thing about holding mutual fund units in Demat form?

Answer
image
ramya Bhaskaran answered.
11 months ago
Follow
You can hold mutual fund units in the same Demat account through which you buy/sell shares. It means you can buy/sell mutual fund units electronically and track all your capital market investments in a single statement. This option is beneficial for those who already have Demat accounts and want a single statement for all capital market holdings. Another benefit is that units can be freely transferred to the accounts of nominees or legal heirs, except in the case of tax-saving funds, which have a three-year lock-in.

However, transactions through brokers involve a yearly Demat fee of Rs 300-500 and a brokerage every time you transact. The brokerage could be more than 0.05% per transaction.

Holing mutual fund units in Demat form prevents investors from investing through the direct route. Those who choose to invest in mutual funds directly save on commission costs. Investing through Demat is a cost to the investor just for the benefit of using the electronic platform.
8 Views