Before you can invest in mutual funds and most other financial products, the intermediary has to verify who you are. This is KYC — Know Your Customer — and it is required under India's anti-money-laundering rules. For mutual funds, it is usually done once and then recognised across fund houses. Done properly, it takes a short time; done carelessly, it can hold up transactions for weeks.
Step 1: Check whether you are already KYC-compliant
If you have invested in mutual funds before, you may already have a KYC record. KRA websites let you check your status using your PAN. Note the status shown — it decides what you do next.
Step 2: Understand your status
| Status | What it generally means | What to do |
|---|---|---|
| KYC Validated | Your details have been verified against official sources, such as Aadhaar records or the Income Tax database | Nothing more is usually needed; you can invest with any fund house |
| KYC Registered | Your KYC is on record, but some details were verified using documents that could not be validated against an official source | You can usually continue with existing investments; a new fund house may ask you to re-verify |
| KYC On Hold | Something needs fixing — commonly an email or mobile number that could not be verified, or a document issue | Update the details; transactions may be blocked until you do |
| KYC Rejected | The application could not be accepted | Complete KYC afresh with correct documents |
The labels and their consequences are set by regulators and the KRAs, and can change; the KRA's own description of your status is the authority.
Step 3: Gather your documents and details
- PAN — mandatory. It should be linked with your Aadhaar; an inoperative PAN can cause problems with KYC and transactions.
- Proof of identity and address — commonly Aadhaar, passport, voter ID or driving licence.
- A recent photograph and your signature — captured digitally in online processes.
- Email address and mobile number — ones you use and control.
- Other details — occupation, income range and a tax-residency (FATCA/CRS) declaration, which are usually collected alongside KYC.
Step 4: Choose a method
- Online, Aadhaar-based: you authorise verification with a one-time password sent to your Aadhaar-linked mobile, or share documents through DigiLocker. This is usually the fastest route to a validated record.
- Online with video verification: some intermediaries complete in-person verification over a short video call.
- In person or on paper: you submit self-attested documents to an intermediary, and a representative completes in-person verification.
Step 5: Verify your email and mobile
You will usually receive verification links or codes on your email and mobile. Complete them promptly. Contact details that cannot be verified are a common reason for records going on hold.
Step 6: Submit and track
Once submitted, the record is processed and uploaded to a KRA, which validates it. This can take a few working days. Check the status on the KRA's website until it shows as Validated or Registered.
You may also have a record in the Central KYC Records Registry (CKYC), which assigns a KYC identification number. Some intermediaries use it to retrieve your details with your consent.
Step 7: Complete the investment account
KYC confirms who you are; opening an investment account adds the rest:
- Bank account for payments and redemptions, in your name
- Nominations, or a formal opt-out
- Debit mandate if you plan to run SIPs — see our first SIP guide
Step 8: Keep it current
Update your KYC when your address, mobile number, email or name changes. Outdated details cause failed communications and, sometimes, a status change that blocks transactions at an inconvenient moment.
Special cases
Minors, non-resident Indians and joint holders have additional requirements, such as guardian details or overseas address proof. Check with the intermediary before you start.
Security: what no genuine intermediary will ask
OTPs are for you to enter, not to read out. Do not share an OTP, password, card PIN or full bank details with anyone who calls, messages or emails you — however official they seem. CompoundX will never ask for your passwords or OTPs.
KYC and CompoundX
When you choose to invest through CompoundX, onboarding and KYC are completed with a regulated partner as part of the Start Investing flow, which names the partner and explains what you will see before you are handed over.