Mutual Fund Nomination: All You Need to Know

Mutual funds are a straightforward way to make you attain your financial goals and increase your wealth. But have you ever wondered what happens to your hard-earned investments when you're no longer around? This is where Mutual Fund Nomination can help you.

It is important to learn the essentials of mutual fund nominees, updates regarding the nomination, and more so that your loved ones won't have to navigate a complicated legal maze. In this article, we look at what mutual fund nomination is, how to add nominees in mutual funds, and where to find nomination forms for mutual funds.

What is a Mutual Fund Nomination?

Mutual fund nomination is a legal process that involves nominating a beneficiary for your investments to ensure that your hard-earned funds go to the right person if something happens to you. It's an efficient way to keep everything simple and avoid any legal complications down the road.

You can choose anyone as your nominee—a family member like your child or spouse, a good friend, or even someone you know from abroad. The person you pick must be someone you trust.

How Do You Nominate Someone For Mutual Funds?

It is possible to add a nominee for your mutual fund online through the investor service centre or through the Registrar and Transfer Agent (RTA). SEBI allows you to name up to 10 nominees. To add or update a nominee in mutual funds online, the following steps are to be followed:

1. Download the mutual fund nomination form from the official website. 
2. Carefully fill in the details, paying special attention to the nominee's full name, nominee's relationship to the investor, contact information, and date of birth. 
3. Have the investor and witness sign the form. 
4. Submit the signed and completed form to the financial institution.

What is The Eligibility For Nomination?

If you own mutual fund units by yourself or jointly with someone else, you can make a nomination. But if you're acting as a guardian for a minor or using a Power of Attorney (POA), you won't be able to make nominations.

Who Can Be A Nominee in Mutual Funds?

When it comes to nominations in mutual funds, investors can choose anyone for their investments, including minors. Non-resident Indians (NRIs), government bodies, local authorities, and religious or charitable trusts can also be nominees.

However, trusts (excluding religious or charitable), companies, partnerships, and Hindu Undivided Families (HUFs) cannot be mutual fund nominees.

Conclusion

Mutual fund nomination is a straightforward but important part of your investment journey. It ensures your loved ones are fully financially secure when you're gone. By knowing the nomination process and keeping it up to date, you can protect your legacy and support your family's financial future.

For more information on investing and reaching your financial goals, visit Tata Capital's Moneyfy website or download the app today!