- Wealth PMS (50L+)
Investing through Mutual Funds is perhaps the most common personal finance advice you get. Mutual fund apps have made it easy for us to follow that advice.
But then there’s this problem of plenty. Too many apps to choose from. Groww, Kuvera, Paytm Money, ETMONEY & Zerodha Coin. Which is the best mutual fund app in India?
In this post, we do an in-depth review of the popular Mutual Fund apps and help you choose the best suits your need.
When we talk about safety, we are referring to the investments that we make in mutual funds.
The apps are just platforms that help us transact mutual funds. The units of mutual funds are held in your name and the records maintained by the Registrar and Transfer agents.
If the app company goes bust, you do not lose any money invested in the funds. It can be a minor hassle to find another app or platform to manage your funds. That’s pretty much the extent of risk involved in using mutual fund platforms.
As far as the risk of your investments disappearing on account of any mutual fund platform, the chances are low to non-existent.
As an investor, you need to ensure that the app you are using is a Securities and Exchange Board of India (SEBI) registered entity.
They need to be either a registered mutual fund distributor (MFD) or a registered investment advisor (RIA).
A distributor offers what’s called ‘regular plans,’ which include commissions, and those commissions can eat into the returns that you get as an investor.
An RIA offers ‘direct’ plans. Such plans do not include commissions and hence offer higher returns in the long run. However, by design, RIA’s cannot offer regular plans. All that they can do is charge advisory fees.
But, many RIA apps have stopped charging fees due to intense competition in the mutual funds’ space.
All the apps that we review in this post are SEBI registered RIAs and offer direct plans. So you can look for them over here on the SEBI site.
Make sure SEBI recognizes the platform you are considering for your mutual fund investments.
ETMONEY, Groww, and Kuvera allow you to log in through your Gmail or Google credentials.
Paytm Money needs you to register as a PayTM user first and then log into Paytm Money.
Zerodha Coin needs you to open a trading & DEMAT account with Zerodha before logging in to the Coin app.
If you do not have a verified KYC, each of these apps allows you to do an eKYC through the app itself. It’s a one-time process, and if done already for one of the apps, it is valid for others.
Now let’s look at the interfaces of each of these apps. We’ve reviewed features specific only to mutual funds part in any of the apps.
With Groww becoming a brokerage, the app highlights Stocks as much as Mutual funds. You can access Mutual funds with one of the tabs at the bottom.
Kuvera was one of the initial direct mutual fund platforms. They offer mutual funds, Online fixed deposits, digital gold, US stock investments, health insurance, and money remittance.
Launched in 2018 as a direct mutual fund platform, today, Paytm Money offers a slew of services including, Stocks, Derivatives, NPS (National Pension Scheme), and Direct Gold.
ETMONEY (formerly known as SmartSpends) was launched in July 2015. It was operating for a few years as a regular mutual funds platform, and by 2018 shifted to offering only direct mutual fund plans on its platform.
It has some unique features such as expense tracking, thanks to its past. It also offers Fixed deposits, Insurance, Credit card, and NPS related features.
Coin is the direct mutual fund platform by Zerodha, India’s largest brokerage in terms of active users. It does what it’s meant to do, i.e., helps you buy and sell direct mutual funds — nothing more, nothing less.
When it comes to screening funds using a multitude of criteria, Kuvera wins hands down.
Its the only app (among others compared here) which provides
Next is ETMONEY also has SIP & Lumpsum-based returns feature for up to 10 years. This gives one a fair idea of how our investment would have performed, had we SIPed vs. invested in lumpsum. It has filters based on Fund size, fund house, and Value research ratings. It also gives a comparison chart with Gold or with the category average. A comparison with key indices would have offered more insight.
Lastly, we have Groww, which has a look back feature, which helps us get a sense if Rs 1000 was SIPed in a fund for the past three years, how much would be the returns today.
Once invested, you would want to know how your funds are doing. This is where the following set of features become essential.
Among all the apps reviewed, Kuvera leads when it comes to value adds, some are paid and others free.
The two paid ones are – Tax harvesting, and the other is Switching from Regular to Direct funds.
Kuvera offers both as a chargeable value-added service. Paytm Money & Groww offers features to switch at no charge only if it’s held in folios. Coin does not provide any such feature, primarily because it holds mutual funds in DEMAT.
Kuvera also has features such as Manage joint / family accounts and Goal-based investing. Others don’t.
Then there are features such as STP (Systematic Transfer Plan) and SWP (Systematic Withdrawal Plan) – these are features that fall between SIP and Lumpsum investing. Kuvera and Groww lead at this.
Since all these apps that we are reviewing are technically RIA’s, they need a way to connect to the AMCs technically. So if you are looking at how the whole MF backhaul works in India, read this post.
You would also need some electronic marketplace. For example, Kuvera, Groww, and Coin use the BSE Star MF tech platform to facilitate the transaction, and ETMONEY & Paytm Money use their own tech.
Does it matter? You may ask. Well, in the past, there have been instances where due to some technical glitches with BSE Star, your transactions may not go through or may show up as failed transactions, and in reality, it may actually go through and cause confusion.
Not that it’s a frequent issue, but it’s good to know the risks.
Groww and Coin are the only ones that offer telephonic support. Kuvera and Paytm Money offer email, ticket, and chat-based support, ETMONEY offers ticket and email-based support. Based on the feedback from our Capitalmind Premium members, We understand Kuvera’s support is quite prompt.
Also, telephonic support is not always better or more prompt than online support for those who offer that.
Both the forms are digitized, but the Demat units are held with your depository participant (DP).
How and where you hold your Mutual fund units becomes vital only in the event of the holder’s death.
If your units are in a Demat format, the legal heir needs to open a new Demat account in his name, submit the death certificate and other required documents, and get the units transferred to the new Demat account.
If you hold units in a folio or SOA format, you would need to submit the documents to both the RTAs that handle your various funds’ back-office operations.
There is another context where holding funds as Folios/SOA helps over DEMAT, which is for Liquid funds that offer ‘Instant Redemption’. In an event where you need to redeem your liquid funds at short notice, SEBI allows for Rs.50,000 or 90% of the investment amount daily, whichever is lower to be withdrawn.
The instant aspect is technically possible only if you are invested through SOA as the Money gets credited to your registered bank account through the IMPS route. In DEMAT, the Money first goes to the broker, and then you would need to withdraw.
Our house view on Emergency funds is that we either use our Savings bank account or a sweep-in FD, and therefore, we don’t consider this an essential criterion to evaluate mutual fund apps.
All the apps reviewed here do not charge any fees for investing in mutual funds. Nor do they get any commissions as these are direct mutual funds. You may wonder how do they make money then? Would they survive at this rate?
At the moment these RIAs do not make money by selling mutual funds, they claim they would use mutual funds as feeders to cross-sell products such as insurance, stocks, gold, and other value-added services.
In fact in 2020, Paytm Money, reached out to SEBI to check if it can get a reimbursement of the service-related expenses such as KYC & platform maintenance costs from AMCs. The argument being, Paytm Money is bearing the cost that the AMC would have borne in any case had the investments been directly routed through them. However, SEBI in its response clearly declined such a possibility.
As of now, the best that we as investors can do is to choose RIA’s who have existing income streams from other product lines, which would ensure greater survivability of the business.
The graphic shows our subjective summary of the popular mutual fund platforms.
While Groww and Paytm money started as mutual fund apps, they both are brokerages now. If we consider Mutual fund-specific features and don’t foresee direct stock investments or if you would like to hold your investments in Non-Demat/SOA/Folio format, we would recommend Kuvera.
However, if you are looking for direct investments, not just in Mutual funds but also in stocks & ETFs, and you are okay to have your mutual funds’ units held in a Demat, we think Zerodha Coin is the right mutual fund app.
If you are interested in understanding how things work behind the scenes of these mutual fund investment apps, read Understanding how mutual funds work in India.
We thank all our subscribers who took time out to share their experiences about the mutual fund apps they use.
Capitalmind received no payment or compensation for this review, neither do we have any affiliation or relationship with the owners of the products or services being reviewed.
Sandeep is on Twitter @mysandz. To connect with us about Capitalmind Premium or the PMS, write to us at premium [at] capitalmind [dot] in or on Twitter @capitalmind_in