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Zerodha Coin – Unlimited Free Investments in Direct Mutual Funds

 

March 2017, Zerodha India’s Leading Discount Broker introduce Direct Mutual Fund Platform – Coin

Investors,

Mutual funds today can be purchased in two ways – either through a distributor or directly from the AMC.

Through a distributor

When purchased this way, the distributor earns an upfront commission of upto 1.5% on your investment and a trail commission of upto 1.5% every year for as long as you are invested in the fund. Yes, that much! These commissions earned are the reason everyone from your bank to brokerage would be pushing you mutual fund ideas to invest in.

Let’s discuss,

Mutual Fund scheme has a Direct Plan and a Regular Plan. A Direct Plan – You can buy directly from the mutual fund companies usually from websites and Regular Plan – You can buy through mediator like broker, advisor, distributor etc. Commission is paid to the intermediary by company in Regular plans. If you invest in Mutual Funds through a broker or a distributor, you are investing in Regular Plans. All distributors like Scripbox, Fundsindia, Bajaj Capital, MyUniverse, ICICI Direct, etc provide only Regular Plans. But when you invest through the Mutual Fund directly or take the help of an advisor you invest in Direct Plans. All Direct Plan of mutual fund schemes require the word “Direct” or “Direct Plan” to be clearly mentioned in the scheme name.

Introducing Coin – Zerodha direct mutual fund platform

  • No commissions whatsoever on your investment – either upfront or trail.
  • Direct mutual funds in DEMAT form, with convenience of one portfolio across equity, MF, currency, etc.
  • Single capital gain statement, P&L visualizations, and more.
  • Easy SIP – start, stop, modify anytime you want.
  • NAV tracking orders. Similar to stocks, place orders to purchase or redeem funds based on NAV.
  • subscribing to Coin irrespective of number/value of MF transactions across all fund houses. Investments are absolutely free.

“Rupee saved is a Rupee earned”. The rupee – “The Coin”

Start Investing with  Zerodha Coin

Zerodha Coin Charges

Zerodha Coin is now absolutely free! read more here.

Note: On sale/redemption of units of a Mutual Fund, there will be a DP charge of Rs 5.5 (CDSL) + 18% GST per redemption order.

Zerodha Coin Review

Invest through Zerodha CoinWhy Zerodha Coin – not other mutual fund Platform question comes in mind right?

But before that we need to understand why only Direct mutual fund plan. Lets check why Direct mutual fund better.

Almost 90% of mutual fund investments today happens through regular plans. In regular mutual funds the distributor gets paid back upto1.5% upfront and 1% end of every year as trail commission.

To give you an example, if you invest using regular plan (assuming return of 15%), SIP of Rs 5000 for 25 years, corpus at end is 1.36 crores. If you do the same through direct, it can be Rs 1.64 crores. Whopping Rs 28 lks more. That is because in regular plan every year 1% goes away as commission, in direct it doesn’t.

You can check Mutual Fund Distributor Earning which is available on AMFI website

So , now you got why Bankers push always mutual fund product to you. Because their income directly connected with your AUM ( invested amount ) No banker or your mutual fund agent tell you how much they earned from it. And its not wrong also if they give you proper advice. But mostly Mutual fund distributor even don’t know who is fund manager of that fund. They just push MF fund which give them best commission.

Presently, the Method to buy Direct mutual funds would be to see the AMC/fund home site or office and directly invest. Various portfolios for distinct AMC’s, obtaining a common Account number (CAN), awkward setting up SIP procedure, generally fairly inconvenient. Hence coin.

Zerodha Coin – Pros

  1. Single Platform for all your investments – Equity, Commodtiy, Currnecy and Mutual Fund.
  2. Zerodha Coin Mobile App – IOS & Android.
  3. Single capital gain statement, P&L, visualizations, and more. – Because Zerodha is not only Zerodha Coin – Direct mutual fund platform but also provide Zero Delivery Brokerage for Equity investment and lowest brokerage in other equity segments.
  4. Soon you will received Loan on Mutual Fund investment as your Mutual fund in Demat form you can easily pledge and take a loan against it.
  5. Coin offers investing in direct mutual funds (we earn 0 commission from your investment) with the convenience of being in demat. So single portfolio across stocks, MF ( over 31 AMC’s and 2000 funds), ETF’s, Bonds etc.
  6. Easy SIP, start stop whenever you want without any NACH requirement. Increase or decrease SIP values at will.
  7. MF or stocks at demat are a lot simpler to maintain by dependents (nominee of Demat) in the event of death. Immediate plans with numerous AMC’s would imply Numerous folios, hard to aggregate and maintain
  8. NAV Tracking orders. Much like stocks, place orders to buy or redeem Funds according to NAV. – its very easy to exit from mutual fund investment when your target achieved.

Zerodha Coin – Cons

  1. No Advisory Module
  2. Account Opening Fees and Demat AMC – if you have low investment ( 10000 or less ) then may be its costly for you.
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