SEBI scraps entry load on mutual fund schemes
The Securities & Exchange Board of India (SEBI) has come out with a New Year’s gift for mutual fund investors by scrapping the entry load on open ended mutual fund schemes.
Presently, investors have to pay upto 2.25% as entry load every time they invest in a fund. However, if the purchase is now made directly from the mutual fund house or it’s investor service centres (ISC), there will be no entry load. Purchases made from distributors like brokers and banks will continue to attract the entry load.
Considering the minimum investment needed is Rs.5,000 for single purchase or Rs.6,000 overall if done through Systematic Investment Plan (SIP), you stand to lose between Rs.112.50 to Rs.135 for every purchase. In fact, for those investing via SIP for a long period or with a higher amount per month, the overall cost could eat up quite a bit into the returns delivered on the total investment.
Some people I was talking with the other day were happy and said they would now “go online with a vengeance”. This is a misconception. Be warned that simply transacting online (via your broker or bank) will not cause the entry load to be waived.
This is possible only if the purchase is made from the fund house or ISC, which means you can either visit their office physically else apply for an Internet PIN and then transact online using that PIN and your netbanking id.
Happy Investing and Happy New Year !! 
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