How can you invest in the Nifty Index Fund directly?

If there is one place where your money could multiply and compound faster, it would be in the stock market. However, for everyone – whether to invest in the stock market or not isn’t even the question. The question is, where should I invest in the stock market? Most people will generally choose to follow an Index. We can clear the foggy thoughts for you. Let’s find answers to the question, “How to Invest in Nifty Index Fund Directly?”

What is the Nifty Index Fund?

The Nifty Index Fund is a mutual fund and it tracks the Nifty 50 Index through investments in stocks of the 50 biggest publicly traded companies in the country. The fund also has an impressive goal to replicate the Nifty 50’s performance through passive strategies. Before we know how to invest in this fund, let us understand in depth not just the perks of Nifty total market index fund but of any kind of index fund as a whole.

Benefits of Investing in Nifty Index Fund

The benefits are listed in detail for you:

  1. It has a low expense ratio

Index funds follow a passive management strategy. They don’t choose separate stocks, but they would only mirror the specific index. This kind of strategy will reduce the cost of management, which will surely reduce the expense ratio. This will also make index funds quite an affordable investment choice.

  1. It is consistent and offers long-term growth

An index fund is designed in order to mimic the performance of a chosen underlying index that has shown consistent growth over the past years. On the other hand, separate stocks would be hard to estimate wrongly or even change quickly. So, if you invest in an index fund it can secure you with these features.

  1. It has broad market exposure and diversification

Investors who choose index funds will attain the benefit of diversification. What makes the product unique is the passive management by the fund manager, who would simply replicate the structure of the chosen index. These funds would copy a stock index, and they would invest in a range of varied stocks that would mirror the index. This explosive nature definitely helps to spread the risk across sectors, companies and more.

  1. Reduced individual stock risk

Portfolio diversification is one of the most important pieces of investing advice. Owning a single stock is risky since its performance might suffer if the company’s performance is poor. An index fund, on the other hand, replicates an index and hence invests in equities of firms and industries represented by the index. As a result, diversity benefits an investor when investing in an index fund because the bad performance of one firm has no influence on the fund’s total performance.

  1. It has tax benefits

Index funds are passively managed funds. As a result of this, they would usually a low turnover, which means the fund management makes only a few trades each year. This generates less capital gains, which are paid to investors. Furthermore, most of these funds have a buy-and-hold strategy, which increases tax efficiency.

How Does One Invest in the Nifty Index Fund?

Investing in the Nifty Index Fund is simple, and let us explain the steps below:

  1. a) You Can Invest in a Nifty Index Fund Through a Demat Account

The steps to open a Demat account are listed below:

Step 1: You will first need to go online and click on open a Demat Account.

Step 2: You will find many varieties. Read the terms and conditions of all the threads and choose one that best suits you and your financial needs.

Step 3: Click on Create a Demat Account.

Step 4: You will be asked for basic information, which you will need to provide.

Step 5: You will be asked to complete your KYC process, and you can do so easily.

Step 6: Deposit money into the account.

Step 7: Choose the funds that you wish to invest in.

Step 8: Purchase units of the fund and manage it through your Demat account.

  1. b) You Can Invest in Nifty Index Fund Through Mobile Applications

You could also invest in the Nifty Index Fund through a broker’s mobile application. The steps to do so are listed below:

Step 1: Go to the App Store on your iPhone or Play Store on your Android based on your phone.

Step 2: Type in a mutual fund.

Step 3: You will find plenty of AMCs pop up; choose the one with the best rating.

Step 4: Download the application.

Step 5: Complete your profile and deposit funds into the application.

Step 6: Look for the Nifty Index Funds and choose a preferred fund.

Step 7: Manage your investment through this application.


Investing in the Nifty Index Fund might be the main goal, but always remember to analyze the assets you invest in. You need to conduct these analyses in depth. Examine the past performance of the fund, know the expense ratio, understand the risk, know the returns and much more. This will make sure you do not make any mistakes with the investment and always end up with enough profit, even if it is an Index fund.

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