You can invest in MFs via your employer. But should you?

C-SIPs may benefit those who have issues with managing money. For all others, say experts, regular SIPs work best

- Neil Borate & Sashind Ningthoukhongjam

A third party such as a friend or business partner cannot contribute to your mutual fund investments; the money must come from your own bank account. One exception to this in Sebi's rules is for employers, who can transfer money directly to employees' mutual fund schemes.

Though this has no special tax benefits, it does have a disciplinary benefit as the money is invested before it hits your bank account, making it impossible for you to end up spending it instead.

Several asset management companies (AMCs), including Mirae Asset AMC and Bajaj Mutual Fund, offer corporate systematic investment plans (C-SIPs).

Ganesh Mohan, CEO of Bajaj AMC, said "Several organisations have already onboarded Empower (the company's C-SIP), with more in the final stages of activation. The growing interest highlights rising demand among employers for seamless, payroll-linked investment solutions that support long-term financial well-being for their employees."

How it works

For instance, if an employee earns a salary of 1 lakh a month and opts for a 5,000 monthly SIP, the employer will deduct that sum from their salary for the SIP and pay them ₹95,000.

The employer/company sends a bulk payment to the AMC periodically with a list of employee names and SIP amounts. Once the AMC receives this list along with the payment, it assigns the mutual fund units to the employees.