Hello Readers! 

Have you added a nominee to all your mutual funds’ assets and investments? 

You might be thinking about why it is necessary to assign a nominee to an individual’s mutual funds holdings. Well, it doesn’t have its significance on returns, but it makes the process of transmission of their mutual fund holdings smoothly to their rightful owner after their demise and thus it is necessary to assign a nominee to your mutual fund investment. Many times, investors forget to add the nominee details or just avoid it to save a few seconds while filling up the investment form. But having a nominee is important.

If you have also skipped this section in hurry, I suggest you must visit your AMC and get a nominee added to your mutual fund holdings.

Why Adding Nomination To Mutual Fund Holdings Important?

The nomination is the process of assigning a caretaker, be it your trusted family members or friends, for your mutual fund holdings, after you pass on, remember nomination doesn’t mean passing your mutual funds holding to that specific person.

Instead, nomination only means that you are entrusting your assets to someone who would be in charge of making sure that your money gets passed on to the right person.

What Is Better, Nomination Or Joint Accounts?

A nominee is mainly a trustee for your investment while on the other hand, joint holders are co-owners of your fund, so if we look keenly, going with the second option that is holding joint accounts is much convenient. However, if you are investing in a mutual fund and you are the single holder for your portfolio, in that case, nomination for your mutual fund holdings become compulsory.

A mutual fund nominee is a person that ensures that the legal heir of your mutual fund holdings gets the money.

Opening a joint account becomes difficult in different situations like we cannot obtain signatures of our family members if we are staying in different cities. This happens when we fill the application in physical form. Also, in the online medium, the joint holder’s details may not be available on hand or there may be a reluctance to key-in the details.

In such a situation, the option investor is left with nominating their mutual fund's holdings. Remember nomination for your mutual fund holdings save it from getting orphaned after your demise and help transfer it to the right owner. And relax it is very easy as you do not need any signature to complete the process.

Who Can Be Your Nominee?

Well, one thing you must remember while assigning a nominee to your mutual fund holdings, that the person in the role of the nominee must be a trusted person. He can be your family member, your siblings, your trusted friend, or any other trusted person. 

You can go adding up to three nominees to your mutual fund folio and the nomination should be done for the entire portfolio. However, you can add a percentage of your assets (in that folio) to each of your nominees.

Can Anyone Appoint His Minor Child As A Nominee?

Well, yes one can appoint his minor child as a nominee for his mutual fund's holdings, but along with that he also needs to appoint a guardian. To assign his minor child as nominee an investor has to submit the birth details of eth child and complete details of the guardian including his name address, contact info, in the nomination form. If the investor fails to do that the nomination would be taken invalid. 

Do remember if you are investing in the name of your child, you cannot assign him/her as the nominee for your mutual fund's holdings. 

Can Anyone Change The Nominee Later In An Existing Portfolio?  

Well, yes, definitely you can do the required changes in the nomination of an existing portfolio later. For this, you need to fill a form and submit to the AMC attached with the photocopies of eth required documents (if any). In case if there are multiple joint holders in the folio, then all investors need to sign the nomination change form. You can get these forms from the website of your mutual fund or with its registrar & transfer agent’s portal.

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).