According to this article, there are there approaches to investing:

  • Approach the fund houses directly and create an account
  • Approach a brokerage firm and create an account
  • Approach an independent entity and create an account

Although the article lists the advantages and disadvantages of each: enter image description here

I am still a bit concerned about security in the last two approaches. If a person opens accounts in multiple fund houses, each account will have it's own password and PIN (which they can easily maintain and safeguard). But if a person uses a brokerage firm (like ICICI Direct) or an independent entity (like FundsIndia or FundsSupermart), won't it be easier for someone to hack into a person's ICICI Direct or FundsIndia account and steal money they've invested in all those funds of various fund houses?
The assumption here is that if the person approaches fund houses and open accounts with all of them, then a person's money might be safer, since it's not so easy for someone to hack into or forge signatures for so many accounts and get away with it. I'm asking this, because a friend tried opening an account with ICICI Direct, and he disagreed with some clause of the form and scratched it out and submitted it. On seeing the form the next time during the formalities, he noticed the line he scratched out was no longer there and somebody had forged his signature just so that the form would go through the account opening verification process without any hassles.

So in a world of money hungry people who are willing to forge signatures or hack accounts, is it really safer to opt for a single account which offers access to all fund houses or to open individual accounts in fund houses?

  • This seems to be a question that wants answers specific to India and so I have added the india tag. Some mutual fund houses in the US allow their clients with on-line access to link their investments on other houses' web sites to their web page, and so it is possible to view all of one's investments on one page. Such a facility might not be available on the web sites of Indian mutual funds. Jan 3, 2015 at 14:59
  • Thanks Dilip, but this wasn't meant to be specific to India. The question is about safety/security of the money and whether it is worthwhile to have a single account instead of multiple accounts.
    – Julia
    Jan 3, 2015 at 15:03
  • Investor protection schemes and regulations vary by jurisdiction, so I think the tag is appropriate. Jan 3, 2015 at 16:11

1 Answer 1


Restricting the discussion only to Internet hacking:

In Option 2 or Option 3, you have to realize that the funds are credited to a specific Registered Bank Account. So the max damage an hacker can do is liquidate your holding.

In Option 2, the Banking Internet Login and the Broker Internet Login will be different, For example HDFC Bank and HDFC Securities. In Option 3, if you choose your Bank, then it will be the same Login. If you choose a Non-Bank as provider then there is a different login.

The risk is no different to investing in shares.

In the end its up to an individual, there is nothing that stops you from opening multiple accounts in option 2 and option 3 and buying the stocks worth particular value.

From an overall risk point of view; Option 2 seems best suited as the units are held in a Demat from by a Depository.

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