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Updating Nominee is easy, Now it’s mandatory too. Post 30th June 2024, investments missing nominations will get blocked for redemption

Hassle free transmission

Adding a nominee ensures that your wealth reaches your loved ones in case of your absence

Comply with SEBI rules

As per SEBI rules, post 30th June 2024, you will not be able to sell/switch from folios where nomination is pending

Mutual Fund Nomination

When investing in a mutual fund, it is essential to ensure that your investment is protected in case of unforeseen circumstances. One way to do this is by nominating a person who can receive the investment in case of the investor's death. This article will cover everything you need to know about mutual fund nomination in India.

What is mutual fund nomination?

Mutual fund nomination is the process of appointing a person who can receive the mutual fund investment in case the investor dies. This process ensures that the investment is protected, and the nominee can claim the investment without any legal hassles. It is important to note that in case the investor has also written a formal will/ document for his estate management, the person(s) mentioned in the will would supersede the nominee as defined in mutual fund investments.

Choosing Nominees for Mutual funds: Things to Know

You must nominate someone when registering to invest in mutual funds. It may most likely be your family members including parents, children, grandchildren, or spouse. A nominee is someone you have chosen and nominated to receive the mutual funds after your death. Nominees also act as the trustees of the assets. It is advised only to appoint a trustworthy person as your mutual fund nominee.

Why is mutual fund nomination important?

Nomination is essential for mutual fund investments as it helps to:

Avoid legal disputes and lengthy procedures in case of the investor's death.
Provide a smooth transfer of the investment to the nominee without any delay.
Ensure that the investment goes to the intended person and not someone else.

SEBI Regulation

As per a SEBI circular dated June 15, 2022, all existing mutual fund investors must update the nomination details or opt out of the nomination. The last date to update the nomination or opt-out of nomination is 30th June 2024.

In the absence of compliance, your folios will be frozen, and you will not be able to redeem your investments.

How to nominate a person for mutual fund investments?

On the INDmoney App - Nominee Center

You can view and define nominees for your entire mutual fund portfolio for FREE on the INDmoney app!

Step 1

Go to your profile section on INDmoney and tap on Nominee Center

Step 2

Click on Mutual Funds a/c and Sync your overall portfolio

Step 3

Check your funds where nomination is pending.

Step 4

Add your Nominee details (you can add upto 3 nominees).

Step 5

On the nominee center, you will now be able to see all the nominees you have added

Mutual Fund Nomination on the RTA Website

As you might know, some Mutual Fund houses are serviced by CAMS as the RTA (Registrar and transfer agent ) while some are serviced by Kfintech. Hence you would need to complete the nomination process for both RTA’s separately.

For fintech RTA, visit here
For CAMS , click here
Give the details - PAN, Mode of Holding, Select Folio Option, Email/Mobile, and Generate the OTP to complete the nomination form and update process

You can easily view and update your existing nominees on the INDmoney app for FREE. You can also invite your nominees to join you at INDmoney to manage your family investments at one place!

Offline Mutual Fund Nomination Submission to AMCs

You need to fill in the nomination form provided by the mutual fund company and submit it along with the necessary documents.

The documents required for mutual fund nomination are:

A copy of the nominee's PAN card
A copy of the investor's PAN card
A passport-sized photograph of the nominee
A canceled cheque or bank statement of the nominee's account

Once the nomination form and documents are submitted, the nominee's name will be updated in the mutual fund records. It is essential to review and update the nomination details whenever there is a change in the nominee's details or the investor's personal details.

Limitation of offline process:

You would need to do this process for each Mutual fund company separately
Since it is am offline process, updating nominee information might take a few days, as compared to the online process where it happens instantly.

Last date for Mutual Fund Nomination

In the absence of compliance, your folios will be frozen, and you will not be able to redeem your investments.

Conclusion

Mutual fund nomination is a crucial aspect of mutual fund investments. It ensures that the investment is protected and can be transferred smoothly to the nominee without any legal hassles. By following the simple process of nomination, investors can secure their investments and ensure that their loved ones receive the investment in case of their untimely demise.

Frequently Asked Questions

How do I add a nominee to my mutual fund online?

You can add a nominee to your mutual fund online by logging into your mutual fund account on INDmoney app. Go to the 'Profile' and then to the 'Nominee centre' section, select the funds that are pending for nomination and click on 'Update Nominee Details', and enter the required details of the nominee. Submit the form and your request will be processed.

How do you nominate a nominee on a mutual fund?

To nominate a nominee on a mutual fund, fill out the details of nomine while buying the funds. If the fund has already been purchased, you can add a nominee on INDmoney app for free in just 2 minutes. Just login to app -> profile -> Nomination centre -> Mutual Funds -> Pending of nomination -> select funds -> enter nominee details and the nomination will get updated,

Who can be a nominee in a mutual fund?

A nominee is essentially a guardian of your investments. When you embark on your journey of investing in mutual funds, it's crucial to assign this role to a trusted individual. The person you nominate could be a close family member such as your parents, children, grandchildren, or your spouse.

Simply put, the nominee is the individual you've handpicked to inherit your mutual fund investments in the unfortunate event of your demise. This ensures that your hard-earned money is passed on to the person you've chosen, thus providing them with financial support. Therefore, the process of nomination is an essential step in the journey of mutual fund investments to secure the financial future of your loved ones.

What is nomination in mutual fund scheme?

Nomination in a mutual fund scheme is a process that lets you pick a person to receive your investment money if something happens to you. This person is called a nominee. You can choose anyone like your parents, children, grandchildren, or your spouse.

This system makes it easier to pass on your investment without any legal hassles. You can add the nominee when you start investing or change it later if you need to. It's a way to ensure that your investments are in safe hands even when you're not around.

How do I add mutual fund nominee details?

You can add mutual fund nominee details at the time of buying the mutual fund or later through the fund house's website or platforms like INDmoney.

To add a nominee to your mutual fund using the INDmoney app, simply follow these steps:

Log into your account on the app.
Navigate to the 'Profile' area.
From there, go to the 'Nominee centre'.
Choose the funds that need a nominee.
Click 'Update Nominee Details'.
Fill in the nominee's details as required.
Submit the form.

Once done, your request will be processed. This easy and quick process allows you to ensure that your investments are secure.

Can an investor nominate more than one person for mutual fund investments?

Yes, an investor can nominate more than one person for mutual fund investments. Up to 3 nominees can be appointed in one mutual fund folio. The investor can choose the percentage allocation among these nominees. The total allocation must sum to 100%.

Can the nominee be changed after the nomination is made?

Yes, the nominee can be changed after the nomination is made. You can also simply remove the existing nominees.

You can easily view and update your existing nominees on the INDmoney app for FREE.

Step 1: Go to your profile section on INDmoney and tap on 'Nominee Center'
Step 2: Click on Mutual Funds a/c
Step 3: Check your funds where nomination is already done. Choose the funds where you want to modify your nominees.
Step 4: Add your new Nominee details (you can add upto 3 nominees) and confirm.

Is nomination mandatory for mutual fund investments?

No, nomination is not mandatory for mutual fund investments. You can explicitly opt out of nomination. However, it is advisable to nominate a person to ensure that the investment is protected in case of the investor's death.

What happens if you do not have a nominee?

In such circumstances, your legal heir can claim your assets. However, the AMC will transfer the units after reviewing the following documents:

Death certificate of the deceased – either original or notarized
KYC documents of the legal heir claiming the assets
Canceled cheque with the bank account number and the account holder’s name attested by the bank branch manager. You can also submit bank account statements attested by the bank branch manager
A Foreign Account Tax Compliance Act (FATCA) self-certification document
An indemnity bond signed by all the legal heirs of the deceased
A notarized will or a succession certificate issued by the court
The legal heir can submit all these documents and a letter for transmission of units and send them to the concerned AMC.

If you do not have a legal heir or any other person mentioned in the will, a relative may claim the assets. In such a case, the claimant has to fill and submit form T3, also known as the Transmission Request Form. The claimant also needs to submit a set of documents depending on the amount to be claimed. You can check the same with the fund house.

What happens if the nominee of the mutual fund dies?

If the nominee of mutual fund dies, the mutual fund units will be transferred to the legal heirs or legal representatives of the deceased investor.

Who cannot be a nominee in mutual fund?

Certain entities such as trusts (except religious and charitable trusts), societies, companies, partnership firms, and Hindu Undivided Families (HUFs) are not eligible to be nominees for mutual funds. Put simply, you cannot pick these types of organizations or groups as your chosen recipient for your mutual fund investments.

Can I add mutual fund nominee online?

Yes, you can add a mutual fund nominee online through your mutual fund account on the fund house's platform or through INDmoney app (Free, in 2 minutes in all mutual funds).

Here's a simple way to add a nominee to your mutual fund on the INDmoney app:

Open the INDmoney app and log in.
Go to 'Profile'.
Find and click on 'Nominee centre'.
Select Mutual Funds.
Select the funds needing a nominee.
Tap on 'Update Nominee Details'.
Enter the nominee's details.
Hit 'Submit'.

And you're done! Your request will now be processed. This ensures your investments are in safe hands.

What is the last date for mutual fund nominee?

As per the recent regulatory updates, the Securities and Exchange Board of India (SEBI) has extended the deadline for mutual fund investors to provide nominee details until September 30, 2023. Previously, the deadline was set for March 31, 2023. This move came after SEBI received requests from market participants and, as a result, decided to postpone the enforcement of the new rule regarding the freezing of folios.

This extension gives mutual fund investors more time to ensure that their investments are secure and that the appropriate nominee details are in place. This step is crucial in ensuring the smooth transfer of mutual fund assets to the intended recipient in case of any unforeseen circumstances.

Who is eligible as a mutual fund nominee?

You can choose almost anyone as a nominee for your mutual fund. This includes individuals, even if they're minors. In case your nominee is a minor, you need to give the details of a responsible adult who will manage the funds until the nominee is an adult.

You can also nominate a non-resident Indian (NRI), but they must follow the current rules on foreign exchange control.

Government bodies, local authorities, designated officers, and religious or charitable trusts can be nominees too.

However, certain groups like companies, partnership firms, Hindu Undivided Families, societies, and trusts (unless they are religious or charitable) can't be nominees.

Can my brother be my mutual fund nominee?

Yes, you can absolutely designate your brother as your mutual fund nominee. A nominee can be any individual whom you trust to receive the funds in your absence. It's essential to note that the nominee will be the custodian of your mutual fund units, and it is advisable to keep them informed about this nomination.

Can we add mutual fund nominee after death?

No, a nominee cannot be added to a mutual fund after the death of the investor.

What will happen if I do not complete the nominee declaration by 30th June 2024?

As per the latest SEBI regulations, a nominee declaration is required for all folios effective from 30th June 2024. You will not be able to redeem from folios not having a nominee declaration. Nominee declaration means that you need to either add a nominee or explicitly agree to opt out of the nomination.

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