In the past few years, there has been remarkable growth in the mutual fund inflow. Apart from AMC websites and applications, there are several other platforms which are making mutual fund investment a seamless process.
There is one important point to consider while doing mutual fund investments, which many of us may not consider important. It’s always better to have joint holders (either two or three) in mutual fund folios with option ‘Either or Survivor’.
I am writing this blog based on my personal experience. My father has been investing in mutual funds since 2011. He passed away in the year 2021. In most of his mutual fund folios, my mother was the second holder except two mutual fund folios. In these two mutual fund folios, there was no 2nd holder and I was the nominee.
In the mutual fund folios having my mother as 2nd holder, for transmission of mutual fund units from my father to my mother after his demise, there were few documents requested by the AMC which included transmission request form, death certificate, cancelled cheque and KYC acknowledgement. This was an easy process.
Coming to the two mutual fund folios wherein there was no second holder and I was the nominee, one of the folio had market value of less than 2 lakh rupees. In this case, apart from the documents mentioned above, I was asked to get my signature attested by Bank manager of the bank wherein I hold bank account. This process was not difficult as well.
The other folio wherein market value was more than 2 lakhs rupees, I was asked to get my signature attested by a Notary Public or a Judicial Magistrate First Class (JMFC), and it was a tedious process to get signature attested by the JMFC.
This limit of 2 lakhs rupees has been increased to 5 lakhs rupees now.
So, it’s better to have joint holders in the mutual fund folios to have seamless transmission of mutual fund units during uncertain times.