Hot Money Tip: This strategy will help you make more money from mutual funds investment | EXPLAINED

Hot Money Tips: 'Mutual Funds Sahi Hai' slogan holds well for those investors who are well aware about their goals and the investment strategy. For example mutual funds are available in two options — regular and direct. In the case of mutual funds investment in regular option, the investor will have to pay the brokerage charges and in that case the net investment will go down. According to investment experts, one should opt for the direct option while investing in mutual funds. The reason why? It fetches around 1 per cent more money at the time of mutual fund redemption. However, what if the person has invested in a mutual fund regular option where commission is cut from investors money?

Speaking on this issue; Varun Sridhar, CEO, Paytm Money said, “Fund houses are empowering its users with Direct Mutual Funds offerings to accelerate wealth creation. There are two options available through which one can invest in Direct & Regular. When one goes through a distributor, broker, or bank, it is usually a regular mutual fund. As one might not be aware, mutual fund distributors get paid commissions thus returns for investors can be lesser if they opt for the Regular option. Investors can earn around 1 per cent higher return on their investment by opting for Direct Funds."

How can teh change be made is explained by Pankaj Mathpal, MD at Optima Money, who said, "Investors have the option to switch from regular to direct by simply switching online or by submitting an offline application to the mutual fund house." 

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Therefore, if you, the investor, want to earn more money from your investment, the direct route is much better. Simply stated, you will have to pay less commission and that means your money will earn more.