Neobank Fi has announced the launch of its investment platform to help users invest their savings into Mutual Funds to grow their wealth. It also announced that it will be launching its P2P investing platform in a few weeks that will offer users the opportunity to diversify their portfolio with up to 9 percent annual returns.
The aim is to help users get better with their finances by educating them about Mutual Funds and making investing fun as opposed to an arduous task, it said in a statement.
How it works
On the Fi app, in a tab called ‘Mutual Funds’, users are presented with investment information and Mutual Fund options from a range of AMCs.
Users can choose these based on their financial goals and risk appetite. Information such as NAV, past performance, etc. are presented in an easy to understand, jargon-free and visually appealing manner.
To address the spectrum of investors from beginners to seasoned investors, Fi has created ‘Fund Collections’ and ‘Advanced Screening’.
Fund collections are a list of curated funds that include options like ‘Starter Funds’ and ‘Staff Picks’ to minimise the information overload and simplify the decision making process.
The Advanced Screener is an industry-first offering that provides investors with detailed screening options down to specific fund managers, among other options.
Millennials today prefer investing from an early age that allows them to remain self-sufficient post-retirement, or even target early retirement. A study conducted by Computer Age Management Services (CAMS) shows that 1.7 million of the new mutual fund investors on its platform in FY18-19 were millennials, accounting for 47 percent of the 3.6 million total new accounts.
Automating Mutual Fund investing for Millennials
Fi takes this further by allowing users to set FIT Rules to automate their investing habits. FIT is a bot that acts on certain predefined conditions chosen by the user like setting aside R100 each time you order food, etc. Money is moved from the user’s Fi savings account into a Mutual Fund of the user’s choice. This allows users to overcome the inertia towards starting investments and builds the habit of investing for millennials. At the same time, it makes investing fun and helps users grow their wealth each time they spend.
Apart from condition-based investing (like investing each time you shop), users can also set up monthly, weekly and even daily auto-invest rules with Fi. Investing money in regular short intervals will average out their risks by breaking down their lumpsum investment amount into several installments, with amounts as low as Rs 100. The app also allows users to invest in lumpsums.
Scaling up Mutual Fund options
In the initial phase, users can choose from a set of index and passive funds, while more funds from all the top fund houses in the country will be added over the next few weeks. Fi’s said it has decided to launch with index funds because they are a safe and easy way for users to get comfortable with the idea of investing and also offer competitive gains at very low fund management fees.
Introducing Peer-to-peer investing
Apart from Mutual Funds, Fi is also set to roll out a peer-to-peer investment option called ‘Fi Jump’ that allows users to invest and earn up to 9 percent annual returns on their investments. This is done in partnership with Liquiloans, an RBI-registered lending-and-borrowing platform. Investments made into ‘Fi Jump’ can be withdrawn at any time - even partially, and the growth of their invested amount can be tracked at any time right on the Fi app, it added.