Mutual Fund Upfront Commision

POSTED BY Pramod Yadav ON February 8, 2012 11:22 am COMMENTS (7)

Hi,
As per my knowlede an upfront commision is deducted frm investors invesment amount by AMC and paid to broker.
so if an investor is investing anything above 10000 Rs , then Rs 100 is deducted and net investment reduces by amount 100.(in case of existing investor)

if i m not wrong this is applicable to all folios, and all scheme.

so can i avoid this deduction if i m investing Rs 9999 through diffrent folios or through diffrent AMC ?

I m using on line account of broker to invest in liquid fund to park my short term money and there is no broking charge for tranjection in liquid fund.

7 replies on this article “Mutual Fund Upfront Commision”

  1. Dear Pramod Yadav, Why are you not using the services of online portals like moneysights or fundsindia? no transaction charge ‘ll be there & all of your investment ‘ll be available to you in a single long in ID.

    Thanks

    Ashal

  2. Pramod Yadav says:

    To Deepak

    Yup it is Transaction Charge.
    But if the broker opted out for this charge even in that case AMC pays it to broker (upfront commision) and it goes from AMCS Recurring expense

  3. Deepak R khemani says:

    There is NO UPFRONT COMMISSION in mutual funds, what you are referring to is a ONE TIME transaction charge which is applicable when you invest in mutual funds through an adviser who has opted in for a transaction charge, if you invest through a person whom YOU PAY for advice regarding investment in mutual funds, in that case NO TRANSACTION CHARGE WILL BE LEVIED. It is the adviser who has given an undertaking to that effect to the regulators. If you are a first time investor then the charge is 150/=

  4. Pramod Yadav says:

    Dear Ramesh
    have u invested 9000 through diffrent folios of same AMC or OR different schemes of different AMCS ?
    Also, i have to invest rs 1 lac so can i invest (9000 * 11 = 99000) in the same day ?

    1. Ramesh says:

      I use 9k for separate schemes, on the same/different day. If I want to put money in the same scheme, I do it over a number of days.
      (I use HDFC ISA).

  5. Pramod Yadav says:

    Dear Ramesh,
    For Sip it is Rs 25 in four go. starting from First ECS

  6. Ramesh says:

    Yes. If you invest 9999 as a lumpsum, you can avoid the Rs. 100 deduction. (I use 9000, actually).

    Also, I would like to point out that the same holds for SIP. If you start an SIP of Rs. 1000 for 12 months (total size=12000), Rs 100 will be deducted (I am not sure about the way it is deducted, whether in 1 go or in multiple installments).

    fundsindia.com does not charge that deduction (though, I am not a user of it).

    Ramesh

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