Rules shape habits. Most of the protections an Indian investor takes for granted today — deposit insurance, clear fund labels, one statement for all your funds, the right to invest without a commission — did not exist a generation ago. Here are the milestones that made investing in India safer, cheaper and easier, and what each one means for you today.
1952: Employees’ Provident Fund
The Employees’ Provident Funds Act made retirement saving compulsory for covered formal-sector workers, with a matching contribution from the employer. For decades the provident fund was the main retirement saving of the Indian middle class, and it still is for millions of salaried families.
For you: transfer your PF when you change jobs instead of withdrawing it; early withdrawal breaks the longest-running compounding most people will ever have.
1963–64: Unit Trust of India
Parliament created the Unit Trust of India in 1963, and its first scheme, Unit Scheme 1964 (US-64), brought pooled investing to ordinary Indians. For more than twenty years UTI was the only mutual fund in the country.
1968: Public Provident Fund
PPF gave self-employed people and everyone outside the formal sector a tax-free, government-backed way to save for 15 years. It remains one of the safest long-term options and pays 7.1% a year at present, a rate the government reviews every quarter.
1987–1993: banks, then private fund houses
SBI Mutual Fund launched in 1987 as the first non-UTI fund. SEBI received statutory powers in 1992, and private fund houses were allowed from 1993. Competition brought more choice, better service and fuller disclosure.
2004–2009: the National Pension System
NPS began for new central government employees in 2004 and opened to all citizens in 2009, offering low costs and a choice between equity, corporate bonds and government securities.
2009: entry loads abolished
SEBI scrapped the entry load — a charge of up to 2.25% deducted from every investment — so every rupee you invest now buys units. Distributors are instead paid by fund houses out of the scheme’s expense ratio.
2011–2015: one KYC and one statement
KYC registration agencies, set up under SEBI rules in 2011, meant that one completed KYC works with every fund house instead of a separate form for each. From 2015, the consolidated account statement (CAS) began to show mutual fund and demat holdings together in a single monthly statement.
For you: one KYC update — new address, mobile or email — flows to all your folios, and one CAS shows everything you own. Our guide to reading your CAS explains each line.
2013: direct plans
From January 2013 every scheme had to offer a direct plan without distributor commission, alongside the regular plan in which a distributor helps you choose, monitor and service your investments. The two plans hold the same portfolio; only the expense ratio differs.
2016: UPI
The Unified Payments Interface made instant, free payments part of daily life — and made setting up a SIP mandate a matter of minutes on a phone.
2017–2019: clear labels and lower costs
SEBI’s 2017 rules defined each scheme category — large cap means the 100 largest listed companies, mid cap the 101st to 250th, and so on — so funds with the same label can be fairly compared. The same year the industry’s “Mutual Funds Sahi Hai” campaign began. From April 2019, lower caps on expense ratios came into force, on a sliding scale that falls as a scheme grows.
2020–21: deposit insurance and the riskometer
Deposit insurance cover rose from ₹1 lakh to ₹5 lakh per depositor per bank in 2020. From January 2021 every mutual fund scheme carries a six-level riskometer, from “Low” to “Very High”, updated every month.
2023–24: tax changes for funds
From April 2023, gains on debt funds bought after that date are taxed at your income-tax slab rate. From July 2024, long-term gains on equity funds are taxed at 12.5% above ₹1.25 lakh a year, and short-term gains at 20%.
2026: a new Income-tax Act
From 1 April 2026, the Income-tax Act, 2025 replaced the 1961 Act. Many section numbers changed — the familiar 80C deduction, for example, now sits in section 123 — while most limits stayed the same.
Seventy years at a glance
| Year | Change | What it gave investors |
|---|---|---|
| 1952 | EPF | Compulsory retirement saving for formal jobs |
| 1964 | UTI’s US-64 | Pooled investing for small savers |
| 1968 | PPF | Tax-free, government-backed long-term saving |
| 1993 | Private fund houses | Choice and competition |
| 2009 | Entry load abolished | Every rupee invested buys units |
| 2013 | Direct plans | A choice between advice and do-it-yourself |
| 2017 | Scheme categories | Like-for-like comparison of funds |
| 2021 | Six-level riskometer | A clear risk label on every scheme |
What has not changed
The direction over seventy years is clear: lower costs, clearer labels, more protection and easier access. What no rule can do is choose a plan for you, keep you invested through a frightening fall, or review your goals each year. That part is still yours — and it is where good advice earns its keep.
Frequently asked questions
Is a direct plan always better than a regular plan?
A direct plan costs less. A regular plan pays a distributor to help you choose, set up, monitor and service your investments. Which suits you depends on whether you will do that work yourself. Our article on direct and regular plans sets out the numbers.
Are mutual funds insured like bank deposits?
No. Mutual fund values move with markets. Your units are held separately from the fund house’s own money and are overseen by trustees and SEBI, but their value is not guaranteed.
Read more stories in the Story Corner.
Figures above are illustrations based on assumed rates of return and are not a promise or guarantee of future returns. Mutual fund investments are subject to market risks, read all scheme related documents carefully. WishWiseWealth is an AMFI-registered Mutual Fund Distributor (ARN-188221).