As mutual fund investing becomes more accessible, investors must carefully navigate platform choices, focusing on direct plans and holding formats to optimise long-term returns and flexibility.
Mutual fund investing has become far easier in recent years, with platforms reducing paperwork, speeding up onboarding and lowering entry costs. But the platform an investor chooses can shape more than convenience. It can affect fees, flexibility and even how units are held over the long term.
One of the most important decisions is whether to buy direct or regular plans. Direct plans generally carry lower expense ratios because there is no distributor commission built into the fee structure, which means more of the return stays invested. Regular plans include that commission cost, so the fund house charges more and the investor’s return is typically lower over time. As several personal finance guides note, the fund portfolio itself is usually the same; the difference comes from the charges.
That gap may look small in a single year, but it compounds. Over long periods, even a fraction of a percentage point can trim a meaningful amount from the final corpus. That is why most large investing platforms now promote direct plans, although some still present regular plans by default and require investors to choose direct options manually.
How units are held matters just as much. Mutual fund investments are usually kept either in statement of account, or SOA, format, or in demat form. In SOA, units are held directly with the asset management company or registrar, so no demat account is needed. This format is generally more flexible, supports systematic transfer plans and systematic withdrawal plans and can be moved between platforms without selling the units. By contrast, demat holdings sit in a securities account alongside shares and other assets, which can make administration simpler for some investors but can also add charges and reduce flexibility.
Recent reporting from Livemint notes that SEBI has moved to allow standing instructions for systematic withdrawal and transfer plans on demat-held mutual fund units, which narrows one of the traditional gaps between the two formats. Even so, SOA remains the more practical option for many long-term investors because it usually avoids demat maintenance fees and makes switching platforms easier. Demat can still appeal to people who want all investments in one place or who may want to pledge units as collateral.
Cost checks should go beyond headline commissions. Some platforms advertise free investing in direct mutual funds, but account maintenance, demat charges or other platform costs can still change the economics. Kuvera, Paytm Money and some other apps offer direct plans without requiring a demat account, while platforms such as Zerodha Coin and Groww have different account structures that investors should examine closely before opening an account.
The decision should also take into account the tools on offer. Some platforms focus on simple buying and selling, while others provide goal planning, portfolio analysis, family account management, external portfolio import and tax-harvesting alerts. Tax harvesting, for example, aims to use the ₹1.25 lakh long-term capital gains exemption on equity funds more efficiently. Kuvera and ET Money are among the platforms that market such features, while others are designed to keep the experience minimal for beginners.
As the articles by INDMoney, Paisabazaar, HDFC Fund and others make clear, the best choice is rarely the one with the flashiest app. It is usually the one that matches an investor’s fee sensitivity, comfort with self-directed investing and need for flexibility. For many people, that means choosing direct plans, preferring SOA holdings and checking that the platform is properly registered before committing money.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
