Groww is a SEBI registered investment advisor and a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and MCX Stock Exchange (MCX-SX). As per the regulations, all securities purchased by Groww on behalf of its customers are held in a dematerialized form with the National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL), which are the two depositories in India. The shares held in a dematerialized form are safe as they cannot be stolen, damaged or misplaced like physical shares. Moreover, Groww’s depository participant (DP) provides a secure and efficient way to hold shares and provides investors with the ability to track their holdings. Additionally, Groww uses bank-level security and encryption to ensure the safety of customers’ personal and financial information. It is always recommended to keep strong passwords, enable two-factor authentication, and keep your account details secure to further ensure the safety of your shares and investments.

What is groww app?

Groww is a mobile-based investment platform that allows individuals to invest in various financial instruments such as mutual funds, stocks, exchange-traded funds (ETFs), and more. The app is available for download on Android and iOS devices. The app aims to simplify the process of investing and make it accessible to everyone, regardless of their financial knowledge or experience. With Groww, users can start investing with as little as Rs. 100 and choose from a wide range of investment options. The app also provides users with various tools and resources to help them make informed investment decisions. Users can track their portfolio performance, get access to expert research and analysis, and even get personalized investment recommendations based on their financial goals. Groww also offers features like instant redemption and quick SIPs, making it convenient and easy for users to manage their investments on the go. The app’s intuitive interface and user-friendly design make it an attractive option for those looking to start investing or manage their existing investments.

What If groww app shuts down?

In case any mutual fund brokers such as Groww shuts down, your account will still be active with the corresponding mutual fund house. This way, you can directly reach out the mutual fund house and enquire about the current status of your account and investments with them.

Is It Safe to Invest Through Mutual Fund Apps?

Over the years, technology has increasingly simplified the process of investing. Previously, investors made mutual fund investments via distributors. However, today, the same can be done instantly with an array of apps.  But is it safe to invest in mutual funds through such apps? Here is what you as an investor should know. 

How Safe Is It to Invest in Mutual Funds via Apps?

Yes, it is safe to invest in mutual funds through mobile applications. This is because an investor’s money cannot reside with these entities, nor can they keep the money with themselves. So if your money is not invested on a particular day, these entities are mandated to refund the same back to the individual on the same day. Besides, such applications employ the latest security measures and encryption to eliminate any potential miscreant. The ownership of mutual fund units is transferred to investors through direct transactions with their bank accounts. As a result, the entire procedure of online investment in mutual funds via apps is designed to ensure the security of every transaction and of investors’ funds. In addition, the market regulator, i.e., the Securities and Exchange Board of India (SEBI), constantly monitors and reviews all transactions to guarantee no foul play. 

What Are the Benefits of Investing in Mutual Funds Online?

Investors choosing to invest in mutual funds online by way of apps can enjoy several benefits. These includes:

Ease of transacting

Investing in mutual funds online through mobile applications allows you to check the schemes or plans of almost all the fund houses. You can monitor schemes, buy and sell mutual funds units at any time. These can be done from anywhere across the globe, as long as investors have a smartphone with an internet connection.

Completely digital process

When investing in mutual funds via apps, at no point in time is an investor required to receive or send physical documents. Instead, each exchange is paperless and totally digital.

Less time consuming

Given that the entire process is digital and paperless, investing in mutual funds through apps consumes less time. Therefore, investors can save considerable time and resources while investing.

Should I invest in Mutual Funds When the Market Is Down or Up?

Contrary to common perception, it is recommended that investors do not try to time the market. However, this is a mistake that most investors make at one point in their investment journey. In fact, trying to time the market can lead to missed opportunities while hampering the growth of one’s portfolio.  So, it is critical to note here that an investor’s time or duration in the market is far more important than the timing of the market. Therefore, it is wise to have a long-term investment strategy as it allows one to ride out market volatility. Moreover, the purchase and sale of mutual fund units should be based on an individual’s risk appetite, investment horizon, and objectives. That said, one can assume that this question is arising due to the on-going pandemic and its impact on India’s economy. In that case, he/she must also bear in mind that the same will eventually be controlled, and markets will recover. But right now, considering the valuation of most of the stocks being high, as per market experts, correction too can be expected. 

Stocks And Shares

Your funds are in a Demat (short for ‘dematerialized’) account, which allows you to hold stocks and other securities in digital form. These demat accounts actually reside at depositories, both the SEBI-approved: the Central Depository Services (India) Limited (CDSL) and the National Securities Depository Limited (NSDL), which was created by the Indian Government’s Ministry of Finance (MoF). At no point are your stocks and shares with the brokerage or the individual broker. They function just as a platform, like the intermediary mentioned above. All they can do is trade as per your instructions using the funds in your trading account.

What Do I Do If My Broker Has Shut Shop?

First and foremost, your shares or any other securities are safe in electronic form at the NSDL or CDSL or the respective AMC. You must focus on your trading account, i.e., the account that contains the money your broker uses to buy and sell on your behalf. If any such unfortunate event were to occur, you need to apply to the Investor Protection Fund (IPF), set up by SEBI, to provide compensation. You need to file a claim for compensation within three years per SEBI rules to become eligible for such payment.

Key Takeaways

  • All stocks and shares are safe in electronic form at their depositories. The broker cannot touch them.
  • Stocks and shares reside in electronic form at the Central Depository Services (India) Limited (CDSL) and the National Securities Depository Limited (NSDL).
  • Mutual fund units reside at asset management companies (AMCs).
  • Brokers are intermediaries; they cannot operate your trading account without your consent. In addition, they cannot use funds from your account for their purposes.
  • If a broker shuts down, you need to apply for compensation for your trading account with the Investor Protection Fund set up by SEBI.

Groww Cons (Disadvantages)

  • Limited investment products with no option to trade in commodity, and currency segment.
  • No Call and Trade services.
  • Do not provide stock tips, research reports, or recommendations.
  • Do not offer to invest in SME shares (Companies listed on BSE SME and NSE Emerge platform).
  • No branch support.
  • No Margin trading facility.
  • No Margin against shares.
  • Advanced order types like BO, CO, AMO, and GTT not available.
  • Trailling stop loss orders are not available in Groww app.
  • Do not offer NRI Trading.
  • SME IPOs are not available.