'You are making a blunder...': Startup founder cautions investors on banks' demat platforms
Regular mutual fund plans, he points out, are typically more expensive since they involve intermediaries who charge a fee.
- Mar 28, 2025,
- Updated Mar 28, 2025 3:19 PM IST
Investors often assume their trusted bank’s brokerage app offers convenience, but according to Kanan Bahl, founder of Fingrowth Media, they’re unknowingly making a costly blunder by investing in mutual funds this way.
Explaining his caution clearly on social platform X, Bahl highlights a significant yet commonly overlooked distinction between mutual fund types: Regular and Direct.
Regular mutual fund plans, he points out, are typically more expensive since they involve intermediaries who charge a fee. Direct plans, however, are cheaper—even when intermediaries such as Groww or Zerodha’s Coin facilitate transactions, they don’t impose extra charges.
Banks typically offer mutual funds through their subsidiary broking entities, which provide platforms to execute trades, including mutual fund SIPs. Bahl explains there's still an information arbitrage at play, which benefits these bank-affiliated brokerage arms at the expense of investors unaware of the cost implications.
"Saving 1% p.a. extra by choosing Groww/Zerodha/Upstox will help you make an unbelievable ₹69 lakhs more (or 25% more) on a ₹10,000 SIP over a 30-year period," Bahl states.
He emphasizes that while local distributors have effectively encouraged equity market participation—and opting for regular plans can still make sense when investors benefit from personalized guidance—using bank-linked broking apps for convenience alone is unjustifiable.
"But not when you have to do all the work and someone profits from your ignorance," Bahl says plainly. He strongly recommends consulting a qualified financial advisor to identify a suitable approach for shifting investments to direct plans, thereby safeguarding investors' long-term returns.
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Investors often assume their trusted bank’s brokerage app offers convenience, but according to Kanan Bahl, founder of Fingrowth Media, they’re unknowingly making a costly blunder by investing in mutual funds this way.
Explaining his caution clearly on social platform X, Bahl highlights a significant yet commonly overlooked distinction between mutual fund types: Regular and Direct.
Regular mutual fund plans, he points out, are typically more expensive since they involve intermediaries who charge a fee. Direct plans, however, are cheaper—even when intermediaries such as Groww or Zerodha’s Coin facilitate transactions, they don’t impose extra charges.
Banks typically offer mutual funds through their subsidiary broking entities, which provide platforms to execute trades, including mutual fund SIPs. Bahl explains there's still an information arbitrage at play, which benefits these bank-affiliated brokerage arms at the expense of investors unaware of the cost implications.
"Saving 1% p.a. extra by choosing Groww/Zerodha/Upstox will help you make an unbelievable ₹69 lakhs more (or 25% more) on a ₹10,000 SIP over a 30-year period," Bahl states.
He emphasizes that while local distributors have effectively encouraged equity market participation—and opting for regular plans can still make sense when investors benefit from personalized guidance—using bank-linked broking apps for convenience alone is unjustifiable.
"But not when you have to do all the work and someone profits from your ignorance," Bahl says plainly. He strongly recommends consulting a qualified financial advisor to identify a suitable approach for shifting investments to direct plans, thereby safeguarding investors' long-term returns.
Track live Budget updates, breaking news, expert opinions and in-depth analysis only on BusinessToday.in