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How To Invest In NFO?
Editorial Team - Mar 13 - 9 min. read
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Investors can access NFOs through online and offline channels. Both methods require adherence to KYC norms and thorough research of the investment objectives and risk tolerance level to earn substantial returns.
Investing in New Fund Offers (NFOs) offers a unique opportunity for investors to participate in fresh investment strategies with mutual fund schemes at a cost advantage! So, if you have been wondering if it is good to invest in NFO, it is undoubtedly a big yes!
Fund houses provide access to these NFOs through online and offline channels. However, making informed choices for the long term is vital to staying invested and achieving the financial objectives.
With careful consideration of the different related factors, you can navigate through the investment avenues and make the right decision.
Here is how to invest in NFOs, the factors to consider, and the process in brief.
How To Invest In NFO?
Investing in NFOs is possible through both the online and offline platforms. KYC verification is one of the most important steps for both channels. Therefore, keep all your documents, such as proof of identity, proof of residence, bank statements, etc., to get your KYC verified.
Offline Channel
- Find a fund house - Research and find a fund house for the NFOs that align with your investment objectives. You can directly visit any of their nearest branch offices to get the application or the subscription form and know the related processes.
- Take the help of a broker - You can connect with an authorised broker to aid in selecting the NFO and completing the related formalities.
- Find the NFOs currently live - Find NFOs that are currently open for investment. Compare them based on their asset allocation strategy and risk profile to choose a suitable option.
Check the offer document for the terms and conditions and the open and close date for the investment. Determine the number of units that you want to purchase and proceed to complete the application procedure.
- Fill out the application form - Provide the necessary details, fill out the application form, and establish your KYC status. Provide all the necessary documents as mandated by the asset management company to complete the procedure.
Online Channel
- Visit the official website - Visit the official website of the preferred fund house and log in with your registered mobile number.
- Find the NFOs - If you are planning to invest in the NFO launched by an asset management company, you can navigate to their mutual funds section and look out for the NFO options.
If you are investing in an NFO offered by an insurance provider, you can check their ULIP plans and the applicable NFOs.
- Check terms and conditions - Check for the offer document, the asset allocation, the risk profile, and the open and close date for the suitable investment option.
- Complete the Application and KYC verification - Fill out the application form and establish your KYC status.
If you are already an investor, you can also buy the NFO using your trading demat account online.
- Make the payment - Based on the minimum investment required and your affordability, determine the number of units for the purchase and complete the payment using a convenient digital payment method.
Things To Keep In Mind Before Investing In NFO
- Assessing Financial Goals And Risk Tolerance - Analysing your future financial goals and risk tolerance is essential to making the right choices while investing in NFO.
For instance, if you are a person with increasing family commitments, being a conservative investor can be the best way to wealth creation.
- Reputation Of The Fund House - Researching the reliability of the fund house, whether it is an asset management company or an insurance provider, is critical to ensure wealth appreciation.
Read about the past performances of their previous NFOs, and look out for the experiences of the fund managers and customer reviews to understand how your investment journey will be managed through the investment term.
- Investment Objective And Strategy - Every NFO is launched with a specific investment theme. And the underlying assets are chosen based on that objective.
Identifying that investment objective and the strategy will help in comparing and choosing the best NFO that will suit your financial goals and risk profile.
- Understanding Offer Document - The offer document has detailed information about the investment objective, asset allocation, fees applicable, and terms and conditions.
Reading and understanding the offer document before investing can help avoid any future discrepancies.
- Minimum Investment And Withdrawal Rules - NFOs generally have a minimum investment corresponding to the number of units that need to be purchased. There are also set guidelines on the withdrawal terms and conditions.
Understanding these factors can help you plan your investment and make wise decisions for better returns.
- Consult A Financial Advisor - Investment in the financial market requires basic fundamental knowledge and a well-calculated decision.
If it can get challenging to make the right decisions, consult a financial expert and discuss your financial objectives to choose the best NFO that can serve your requirements and affordable long term.
Conclusion
NFOs can be purchased along with the term plan through the online and offline channels. It cannot be bought separately. Compliance with KYC norms is a prerequisite to purchasing the NFO. While investing in NFOs can be enticing, it requires careful analysis. By analysing your financial goals, risk appetite, the NFO options and their investment strategies, you can leverage on achieving your long-term financial objectives with substantial returns.
