Piggy, India’s go-to savings & investment platform allows users to switch from regular to direct mutual funds instantly

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Smart Switch helps users earn higher returns as intermediary commissions can be avoided and help reduce expense ratio.

New Delhi, March 14, 2019:- Piggy, India’s first fully dedicated savings & investment app recently introduced an easy, smart switch feature that allows users to convert their expensive regular mutual funds to commission free direct funds. Introduced by the Securities and Exchange Board of India (SEBI) in 2013, Direct Mutual Funds made it mandatory for all Asset Management Companies (AMCs) to provide an option to invest in mutual fund schemes directly, allowing them to avoid up to 1.5% in commissions on the investment value. Through Piggy’s Smart Switch feature, regular mutual fund users can make this transition directly and without any charges or fee.

The major difference between Regular and Direct Mutual funds lies in the commission charged. Both direct and regular mutual funds are two versions of the same fund, difference being that one can earn more returns in direct funds by avoiding commissions. In the case of a regular plan, the AMC or mutual fund house is required to pay a commission to an intermediary as distribution expenses out of the investment made by the investors. In case of a direct plan, no such commission is charged. Instead, with Direct Plans, the commission is added to your investment balance, thereby reducing the expense ratio of your mutual fund scheme and increasing your return over the long-term. Direct Mutual Funds help investors achieve higher returns when compared to Regular Mutual Funds. The returns in case of Direct Mutual Funds is higher by around 1 -1.5%.

Elaborating on the same, Nikhil Mantha, Co-Founder & COO, Piggy said, “The current procedure of making a switch to direct mutual funds is very tedious, as it involves selling all your investments in Regular Plan Mutual Funds and starting fresh investments in Direct Plan Mutual Funds. This prevents users from switching to direct even though the cost benefits are considerably higher. Through Smart Switch, an algorithm developed by Piggy, users of any mutual funds can shift to direct plans seamlessly. It prepares a smart schedule in order to optimize your returns. It also provides you with a stipulated date, on which an investor can choose to switch his investment to Direct Plans without being liable to pay exit loads, and optimizes your tax savings, all within a few minutes! And the whole process is completely automated and done at a click of a button.”

A high expense ratio eats directly into your returns and will reduce the wealth creating potential of the fund. The Smart Switch option helps users to make substantial savings, complete the transition quickly and even manage multiple switches easily by recording transition dates and incorporating retrospective effects. Smart Switch also considers various other factors to ensure the user is not liable to pay an exit load or break the lock-in the period of his ELSS investments.

About Piggy

Piggy was started in 2016 by Ankush Singh, Kunal Sangwan, and Nikhil Mantha to help Indians save and build wealth. With Piggy Investors can invest in direct mutual funds and track their employee provident fund. The core idea of Piggy is that a technology-driven, user-focused service can solve the savings & investing problem in India. Piggy is backed by US based Startup Accelerator, Y Combinator. The app constantly strives to make investing a simpler and more rewarding experience for its users. By leveraging technology and keeping its costs low, Piggy plans to give users access to commission free services and help them maximize their returns.

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