Also is it important to add nomination?Asked
Nomination is the process of appointing a person (nominee) who will have the ownership and will also take care of the assets currently owned by the account holder after his/her death.
Nominating a person for your assets is a very important decision, the account holder has to make. Nominee can be anyone from a friend, family member, relative or any other social welfare organisation. Nominee must be a reliable and trustworthy person who will be able to take care of the assets and will not misuse them after the owner’s death.
In the case of mutual funds, an investor can fill the form with nominee details either at the time of investing or at a later point of time. Also nominee can be changed later and there are no restrictions on the number of times the nominee can be changed. Nominees are made only in the cases of individuals.
An investor can register up to 3 nominees for an investment and can also specify the percentage to transferred to each of them. By default, the investment is distributed equally among all the nominees.
Nomination is important as it smoothens the process of investment transfer after the death of the owner. In case the nominee is not mentioned in the details, the claimant has to provide all the documents in order to take charge/ownership of the assets of the deceased.
Also now AMCs have come up with the online option of updating the nominee details where the investor has to just login with the user ID and password, click on nominee details and update the same, post-verification the details are recorded in the data of the AMC.
We, at Groww encourage our investors to assign a nominee when investing, even if you have missed the same, please request a form from us . Please contact us on +91 9108800604 or you can write to us at [email protected]
In the banking sector, the term Nomination means nominating an individual to whom the money in their accounts will go in the event of their demise. The same applies to Mutual Funds as well. An investor can nominate an individual or multiple individuals to whom his Mutual fund Units will get transferred in the event of the investor’s demise.
It is advised that the investor selects a nominee for your Mutual Fund Scheme at the time of purchasing the units. The nominee can be a family member, friend or any individual you trust. The details of the nominee can be added in the initial phase in a Nomination Form.
We, at Groww, encourage our clients to assign a nominee and have provided the facility for the same whilst purchasing units of any Mutual Fund Scheme. Nominating multiple individuals is also an option that an investor can take. A nomination can also be changed at any time, if you wish to do the same. An investor can nominate up to 3 nominees while also mentioning the percentage of the amounts going to each nominee. In the event the investor fails to mention the percentage breakdown, equal shares will be allotted to each nominee. An investor can update the list of nominees at any time during the tenure of the fund by making an application to the concerned fund house.
In the event of the demise of an Investor, having a nominee will facilitate easy transfer of funds. Not appointing a nominee would necessitate the claimant to produce various documents such as Legal heir Certificate, Will and No-objection Certificate from other legal heirs to get the funds transferred. It may also lead to unnecessary litigation and delay in accessing the units of the fund.
I hope this answers your question satisfactorily. For further details you can visit our website or contact us.
The inclusion of nomination in mutual funds is important for controlling of the portfolio in absence of the investor. According to the law, for many mutual funds, addition of nominee has been made mandatory. The ideal condition is when you include a nominee in your fund, the nominee itself should be aware that he/she has been nominated by you.
Mutual funds form contains a space wherein you can fill nominee details. Every mutual fund comes up with a simple format and guidelines for adding nominations or changing them. A folio can have up to three nominees for which different percentages of the amount can be allocated. There is a provision of changing nominee whenever required (any number of times). Changes can include change in name, proportion of the amount. There is no specified validity period for a nominee.
Individuals, applying for or holding units, can give nominations on their behalf. Corporates, societies or other institutions who act as investors are not allowed for nomination. In case you are nominating a minor, then details of the minor’s guardian should be included in the nomination form. A trust cannot become a nominee. NRIs can be added as nominees subject to certain foreign exchange conditions. In case of a folio having joint holders, all joint holders must sign the inclusion / cancellation of a nominee in the folio.
These are the general rules and conventions which are valid across all mutual funds. If you wish to enquire about specific funds, then read the mutual fund documents carefully and consult our experts in case of any queries.
if you have signed up on Groww.in, you would already have been asked to fill your nominee. If you did not do so, you can request for a form from us. Please contact us on +91 9108800604 or you can write to us at [email protected]