Is there any charge for switching mutual funds from regular to direct?

Most direct mutual fund platform also offers an online financial advisory system to guide you through the problem. Switching your mutual funds is very much similar to that of making a new investment. Hence, it is advised that you take it seriously.

What happens when we switch from regular to direct mutual fund?

Many investors shift from regular to direct equity mutual funds when they realise the benefit. In a regular scheme, a fund house pays a commission to the agent. The expense ratio in a direct mutual fund is minus the commission.

How do I transfer from one mutual fund to another?

To switch within the same fund house, fill up a switch form specifying the amount/no. of units to be switched from the source scheme and name of the destination scheme. You must fulfill the minimum investment amount criteria for both switch-in and switch-out schemes.

Does it cost money to transfer investments?

Fees to transfer a brokerage account The typical fee ranges from about $50 to $100, but not every broker has an account transfer fee. The only way to know how much your old broker charges is to check its list of fees or contact customer service. You may avoid this fee though, because your new broker may cover it.

Are transfers between mutual funds taxable?

An exchange between different funds in a nonretirement account is a taxable event that will generate a 1099-B, provided that the from fund has a fluctuating value (i.e., not a money market) and the to fund is different from the from fund.

Can you transfer mutual funds?

You can transfer mutual funds in kind as long as your new brokerage has an agreement in place to accept the funds or fund families you have money in. But if your new brokerage doesn’t offer the same mutual funds, it doesn’t have to be a deal-breaker. There are other ways to get your money transferred.

Can I change my mutual fund from regular to direct plan?

Ans. Yes. You can change your mutual fund from a regular to a direct plan. However, since this switch is considered as the redemption of one scheme and new investment to the other (via direct plan), there are certain expenses that you will have to incur during the process. Ques.

What is the difference between direct and regular mutual funds?

The major difference between a direct and a regular plan is that in a regular plan, the investors have to pay an expense ratio as a commission to the intermediaries, which eventually results in lower returns. On the other hand, investments through direct plans offer higher returns and no expense ratio. Ques. How do I start a direct mutual fund?

Can I switch funds within the same fund house?

As we have seen previously, switching within the same fund house involves switching between schemes or from a regular to a direct plan. The difference between a regular and direct plan is that the former includes commissions you pay to a certified broker, while the direct plan does not have these costs.

Is switching a mutual fund from one plan to another taxable?

Ans. Yes. Since switching of mutual funds from a regular to a direct plan is considered as redemption, the taxation rules while switching the plan is similar to that applied while redeeming. If equity-based mutual funds are held for more than a year then they are not taxable for the investor.