Three things to watch out while filling MF application form

Bekxy Kuriakose

FOR many investors, especially those who are investing for the first time, filling a mutual fund application may look daunting. However, it’s vital that it’s done properly and checked so that important details are captured correctly. This is all the more important if the form is being filled out physically. If one sees the customer complaint statistics filed on SEBI website as reported by various mutual funds, a large number of complaints pertain to incorrect details captured in application forms due to “illegible data” or errors made; be it w.r.t PAN, bank account details, address or any other. So do take care when you fill out the application form and watch out for these three factors:

Bank account mandate

In your application form you will notice a space where bank account details are asked for. When you redeem/sell your investments money will be credited to this account by the mutual fund. It is possible to register multiple bank account mandates. However, care has to be taken that this is done with each AMC whose schemes you propose to invest in. At the time of redemption, you may specify which account you want the redemption proceeds in (in case you have registered multiple bank accounts). The account that you make investment from can be different from the account that you want redemption proceeds in. However, the investment done must be from the first holders account.

Nomination details

Towards the end of the application form you will notice a space where nomination details are asked for. It is important that this is filled up before submitting your application, so that transfer of MF units and redemptions can happen without any hassles in the event of death of the unit holder. If these details are missing then the nominee or heir would have to go through a lengthy and cumbersome process in terms of producing the will of the deceased, order from the court in the absence of will, indemnity, legal heir certificate etc. If the nomination details are in place then the nominee can claim the units by producing just some regular documents like death certificate, KYC details etc. To make matters even simpler, it is advisable to hold your investments in joint name rather than single name.

Verification of account statement

Finally after filling up your form and making your investment you should get a confirmation of the unit allotment in five business days. Once you get the account statement, do check all the details thoroughly. Bank details, nomination details, address, details of the plan/option of the scheme you invested in, etc. everything should be checked. Any discrepancy should be brought to the notice of the Asset Management Company and ensure that rectification is done.

A bit of care and due diligence at the initial stage of investments can save a lot of heartburn and hassles later. So take care and happy investing. 

The writer is Head – Fixed Income, Principal PNB Asset Management Company. The views expressed in this article are her own