Hello Readers!
Working women are independent and highly interested in a well-planned budget. Most of the women plan their savings, then investment, and after that their expenses. Many of the women, as soon as they start earning their plan their investments in different financial instruments, to secure their future goals.
For women who start investing in mutual funds before their marriage, the problem occurs after they get married and look towards changing their maiden name. As she had investments in mutual fund houses, she has to look forward to changing the name, which would require making the name alteration in records of all of them, for future redemptions or any other transactions.
Well, dear women, need not worry, the process is simple and straight-forward.
How To Process The Procedure?
Well, in order to get her name changed for all her investments in mutual funds, she has to update her KYC. For that, she must consult a KRA (KYC- Registration Agency) or a mutual fund to facilitate changing her name.
- To update her KYC in this scenario, she needs the following document’s xerox to be attested with the KYC update form:
- Attested copy of marriage certificate
- Attested copy of identity proof (PAN, Passport, Voter’s ID, Driving license) with the new name or husband’s name (in passport)
- Sometimes, ‘No Objection’ letter might also be demanded from all the unitholders
In case the reason behind the name change is not marriage but something else, then the investor can submit proof showing the publication of the name change in the official gazette or newspaper advertisement.
After she updates her KYC, now she needs to write via mail or message, to all the mutual funds informing them about the name change and share details regarding folio numbers, old and the new name, old and new signatures along with bank or address change, if any.
Here what women miss is updating their bank account. So, when you update your name in KYC, do update it in your bank account, especially with the bank account that is linked with your investment.
How About Investing Together?
After marriage couples share everything, room, their talks, their planning, so what about sharing your investments with your husband? Will it be an advisable option? And does a mutual fund allow you to make these alterations?
Well, currently no mutual fund schemes allow for converting a single ownership status of mutual fund units into that of joint ownership. As per AMFI (Association Of Mutual Funds In India), the addition of a 2nd name or 3rd name in an existing mutual fund account constitutes a ‘transfer’ of assets, requiring payment of stamp duty, etc. And above all that, this process is too difficult and lengthy to carry out. You might have to do many changes and updates including changes in the Demat mode as an ‘off-market transaction’ with plausible tax implications.
However, there is another best choice for you, instead of investing together in the fund with joint ownership, you can your husband as nominee for all your investments in a mutual fund. Mutual fund investors have the option to add up to three nominees to their existing fund account by mentioning the share of each nominee.
Making your partner a nominee in your mutual fund investment will make the transfer of units to your partner easy and convenient, in case of an unfortunate event.
Different Modes Of Holding- Have A Look!
There are basically three modes of holding in mutual funds- Single ownership, Joint ownership, and Anyone or Survivor.
In the case of Joint Ownership, you can add up to three names. In this status, the ownership right is equal for all the members, and they cannot transact unilaterally and without the consent of other members. For any transaction or redemption signatures of all the owners are required.
In the case of Anyone or survivor ownership, any one of the owners can process the transaction or redemption without the consent of others. This mode of investing making it easy to process transactions or redemptions, in case of sudden or unexpected demise.
Also, a nominee is simply a trustee for your mutual fund units in your absence and not the legal beneficiary. If one of the joint owners dies, the surviving member becomes its default owner.
What To Do?
Well, if you look for an easy and hassle-free holding then the third one that is Anyone or Survivor is, as it allows all the unitholders to operate without seeking approval from others. However, in case you don’t want your partner to take unilateral decisions, then you can opt for joint ownership. But here you need to note that one must choose a ‘joint holding’ mode at the time of filling the application and by adding names of those who are KYC compliant. Names cannot be added later.
In case if you want to invest jointly with your parents then you have to start a fresh investment. And for your existing investments, you can add your partner as a nominee as changing the holding status is difficult.
Keep reading for more updates on Mutual Fund Investment!!
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 to future returns).