KYC simply means Know Your Customer.
For all first time investors, trying to open a bank account or invest with a financial institution (FI), they must have come across a term called KYC.
It is a process you need to go through so that your identity as a customer is validated. This way the banks (or FI) can obtain information and details about the identity and address of the customers. It helps safeguard the bank’s services against misuse.
KYC was introduced to avert banks/FI from being used by criminal elements for terrorist financing activities or money launderings. The main objective is to make sure that any deposits/investments being made are in the name of a real person and not a fictitious one. It also helps to curb black money.
This procedure has to be adhered to by all Mutual fund investors. KYC procedure further enables banks/FIs to know and understand their customers, their financial dealings better so that they can manage their risks wisely.
KYC Registration Agency (KRA), an entity registered with SEBI holds the information about the investor in a single database. All Banks, Fund Houses, and Mutual Funds Distributors can access. CAMSonline, NSE, and KDMS (Karvy), etc. are agencies most veteran investors are familiar with.
Why is KYC mandatory for investing in mutual funds?
KYC is compulsory for Mutual Funds Investment, since the SEBI & AMFI ruling of 2012.
Before 2012, if you invested an amount of more than Rs. 50,000 in a financial year, you would need to submit a copy of your PAN.
SEBI later added uniformity and consistency amongst all SEBI-registered intermediaries and announced a common Know Your Client Procedure. So now the Portfolio Managers, Mutual Fund Companies, Venture Capital Funds, and Stock Brokers, etc. do not ask for the ID documents, every time a person is investing. This makes it easier to comply, with all the stakeholders.
Therefore, now, there is no need to submit a copy of your PAN Card separately, on every occasion of investing. You need to do it only once (at the initial stage).
Just remember that you need to get KYC done only at the time of investing in any mutual fund scheme. Both KYC and Mutual Funds investment has to be done together. You cannot do KYC first and invest later.
In short, Know Your Customer is a prerequisite to start earning from the best mutual funds investments. Do this once, at the initial stages and you are KYC-compliant for all your future mutual fund transactions.
How to Check if you are already KYC-compliant?
You may be already KYC-compliant. It is quite easy to check your eKYC status online. KYC status can be checked at any of the below-mentioned websites depending on where your KYC Application Form was submitted:
- Enter your PAN Number and click “SUBMIT”
- Check the status
- If the status is showing “In process”, “Verified” or “New KYC Registered” then you are KYC compliant. You can proceed with your Mutual Funds registration process.
- If the status is “Invalid data” then you need to initiate the process.
You need to submit the below documents:
- Self-attested copy of your PAN card,
- Self-attested copy of Address proof. It could be either Latest Telephone/Landline/Mobile Bill, Latest Electricity Bill, copy of Passport, updated Bank Passbook/Statement, Latest Demat Account statement, copy of Driving License, Ration Card or Rent Agreement.
- Filled KYC Application Form. You can download your KYC Application Form Here.
- A recent passport-sized photograph.
How to get your KYC done?
CDSL Ventures Limited is the nominated authority to conduct the Know Your Customers procedure. It was promoted by BSE-Sensex along with some Nationalized Banks, such as State Bank of India, Bank of India, Bank of Baroda, etc. to conduct the Know Your Customer procedure.
You can complete the process either offline or online.
A. Offline Process
- Download the KYC Application Form. Fill in the details as required. Put your Signatures on it.
- Attach the photocopies of ID Proof, Proof of Residence, and your passport size photograph along with the Form.
- Submit the form at the offices of the authorized entities or intermediaries with whom you wish to invest in mutual funds.
B. Biometric Process (Adhaar Based)
If you already have the Aadhaar Card, you can go for Aadhaar-based KYC. You will need to submit a copy of your Aadhaar to the Fund House, Broker, or Distributor. They will map your fingerprints on their Biometrics scanner and link it to the Aadhaar database. By matching your fingerprints to those already fed in the database, your details come up. This would validate your details. Now you can easily proceed with investing in your Best mutual fund investment.
C. Aadhaar eKYC-Online Process
- Create an account on the KRA’s official website by filling in your personal details, as required.
- Provide your registered mobile number that has been linked with Aadhaar Card number. You will receive an OTP for verification.
- Upload the self-attested copy of your e-Aadhaar and accept the Terms of Declaration.
Complete your KYC with WealthBucket
The off-line process is time-taking and tedious. And you would need to visit the KRA office in person, taking a day off from your profession/job or business.
So why not get the process done with WealthBucket? It will typically take less than 5 minutes. The company never uses the personal details you provide for any other purpose.
In fact, the entire process of investing in Mutual Funds doesn’t take more than 10 minutes.
We are a registered distributor offering well-researched mutual funds, suggested after carefully understanding your financial goals. So you earn higher returns with no hassles. We offer ease of investment in Debt Mutual fund, Large Cap Mutual fund or Multi-Cap Mutual fund, and many more.
Call now at +91 8750005655. You can mail your queries at firstname.lastname@example.org.