Senesx8 min ago
Forget UPI! Now invest in mutual funds directly with cash—Here’s how it works
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
Did you know that you don’t need UPI or net banking to invest in mutual funds? Yes, even individuals without access to digital banking or a PAN card can invest in mutual funds—using cash. SEBI allows certain individuals to invest up to Rs 50,000 in cash per financial year.
Here’s a complete guide on how it works.
Representational Images: Pixabay, Unsplash, Freepik
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You can invest in mutual funds using cash—here’s who can
1/8If you’re a small trader, farmer, or a wage worker without a PAN card or bank account, there’s good news: SEBI allows cash investments in mutual funds up to ₹50,000 annually. This initiative is especially beneficial for those outside the formal banking system.
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What is mutual fund and how does it work?
2/8A mutual fund is a pooled investment managed by professionals. It collects money from investors and invests it in shares, bonds, or other assets. It’s designed for people who want to grow their wealth without directly entering the stock market.
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SEBI’s rule: No UPI needed, cash also accepted
3/8While most people invest in mutual funds via UPI, debit cards, or net banking, SEBI has made it possible to invest in cash to promote financial inclusion. This move ensures that lack of digital access isn’t a barrier to wealth-building.
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Investment limit for cash-based mutual fund purchases
4/8According to SEBI rules, a maximum of Rs 50,000 per financial year can be invested in mutual funds via cash. This is meant for resident individuals who are not part of the tax-paying population and typically operate in cash.
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Who can invest in mutual funds using cash?
5/8People like farmers, small traders, and labourers who don’t have a PAN card or bank account are still eligible. This facility enables them to participate in mutual fund schemes legally and securely—offline.
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Regulatory backing: PMLA and SEBI guidelines explained
6/8This option is supported by the Prevention of Money Laundering Act (PMLA), 2002, and included in SEBI’s Anti-Money Laundering (AML) regulations. These rules ensure that even cash transactions are well-regulated and traceable.
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Step-by-step process to invest in mutual funds via cash
7/8To invest via cash:
Visit the mutual fund house or an authorised mutual fund agent
Fill the investment form
Provide KYC details (PAN card is still needed for KYC compliance)
Deposit the cash
Receive mutual fund units based on the NAV of the investment day
Take a receipt for your records
Note: KYC is mandatory even for cash investors.
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Offline but official: Don’t forget your KYC and receipt
8/8While the cash investment route is offline, it is completely legal and regulated. Make sure to complete your KYC process before investing. Always collect a receipt for the cash deposited—it serves as proof and ensures transparency.
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