Hello everyone,
My investment horizon is more than 30-40 years.
So which is better for me?
Have Mutual Funds in SOA format or Demat format.
My Understanding:
DEMAT advantage: All investments are in a single account of govt (CDSL/NSDL), so I feel it’s more safe and easy to manage. And because of single account, it will also be easy for my nominee to get everything in case something bad happens to me.
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That is very much true, and I can tell you this from my personal experience claiming SOA is not easy, every fund & different AMCs requires forms and notarized certificates which adds to the cost of claiming. Plus all AMCs are not available in small towns and villages which also adds up to the issue. Not everyone understands where to look for financial assets and sometimes SOAs do get overlooked until someone checks the CAS.
If you have 5 MF from different AMC think about changing your mobile no or bank account. It’s just a hassle, You can spend your valuable time on something better than filling out forms and sending them to AMCs.
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This is true but if you use a platform like Kuvera then you can do all these things from one app.
In addition to the advantage, SOA (Kuvera is SOA) doesn’t cost anything however AMC will be charged when your investment crosses a certain limit (50k considering a BSDA a/c) in demat.
PS: Myself using Kuvera for last 4 years
I don’t think a nominee can claim funds via kuvera app, the nominee still has to contact individual amc and send them transmission certificates in case of SOA. 30-40 years is a long time and a wealth-creating time. Wealth is not always enjoyed by the creator sometimes it gets passed on to the next generation. Well, zerodha charges you amc, one can use other demat accounts which are amc-free (upstox, finvasia, fyers, mstock…) they too hold mf in demat form.
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Thank you for replying.
Is there any way to find out which brokers stores mutual funds in demat account?
The amount of AMC should be looked at as a percentage of the total invested amount in my opinion.
For example:
if AMC=300 and Investment is 10,000 then AMC=3%
if AMC=300 and Investment is 10,00,000 then AMC=0.03%
In my opinion, if Zerodha and AngelOne take AMC then they should be able to provide better service, be profitable, and should be able to keep running in the long term.
And since they have a large user base, if any problem occurs, then whole media will be talking about it and will ask for solutions. SEBI will also jump in quickly to save investors. Even if some solution comes up, then also many people/newsChannels/Websites will make guides about the solution.
Now imagine some problem happening with a small company with little users. There won’t be much news, and not many people will be talking about it.
Therefore if the AMC% is low compared to invested amount, then in long term opening account with good/big broker is a good choice in my opinion. Example Zerodha, AngelOne.
Otherwise go with Upstox as it is free for investing in mutual funds.
PS: for reference.