Investing in mutual funds is one of the most popular ways to create wealth and achieve financial security. However, it's important to nominate a beneficiary in order to ensure that your hard-earned money is transmitted to the right person in case of your absence.
In June 2022, the Securities and Exchange Board of India (SEBI) issued a directive requiring mutual fund investors to either choose a nominee or opt out of the process by filling out a declaration form. For those just starting out, the rule was effective from August 2022, while existing investors were given until the end of March 2023 to update any relevant information.
Failure to provide either the nomination or no-nomination form by March 31, 2023, will result in their folio being frozen. This implies that they won't be eligible to carry out any redemptions or withdrawals from their investments until they submit the required details.
Why is it important to add a nominee?
Naming a nominee is a crucial step while investing in mutual funds. It facilitates a smooth transition of funds to your beneficiary in the event of your death or inability to transact.
It can also be beneficial while transferring mutual funds when switching jobs or changing cities. Therefore, it's essential to add or update your nominees when investing in mutual funds.
In order to add or update a nominee, you can visit the KFintech or CAMS website. Alternatively, you can use the MFCentral platform to make changes to all your nominations in one go.
Adding a nominee through KFintech
Adding a nominee to a mutual fund folio through KFintech website is a simple and straightforward process. The first step is to visit KFintech website and provide your PAN. Once your account is authenticated, you will be able to view a list of your mutual fund folios.
From the list, select the folio you wish to add a nominee to and click on ‘Nominee’ in the drop-down menu. Once the nomination has been processed, the nominee will be able to access the mutual fund folio and make changes to it, such as redeeming the funds.
It is important to note that the nomination is only valid until the death of the nominee. If the nominee dies, the nomination will be considered void and the mutual fund folio will be transferred to the legal heirs.
Adding a nominee through CAMS
Step 1: For the online process, visit the CAMS website at www.camsonline.com and click on the ‘MF Investors’ tab and then select the ‘Nomination Opt-In/Opt-Out’ option.
Step 2: In the next step, access the ‘Nomination Opt-In/Opt-Out Form’ tab where you can download the necessary physical forms to update your nominee.
Step 3: You will then be able to utilise the online feature to declare your nominee or opt out of a nomination for your Mutual Fund folio.
Step 4: Enter your PAN card details for either a fresh nomination, a change of existing nomination or for a consent for ‘No nomination’.
Step 5: Select the Mutual Funds and enter the OTP received via your email or mobile for verification. In the next screen, you will be able to add/update or opt-out of the nomination.
Step 6: Alternatively, you can also submit the duly filled and signed physical form at any CAMS centre.
Step 7: The form should contain all the necessary details regarding the nominee such as name, relationship to the investor, address, and other details.
Step 8: Once the form is submitted, the CAMS centre will complete the necessary process and update the mutual fund nominee to the investor’s mutual fund folio.
Adding a nominee through MFCentral
MFCentral is another platform where you can add or update a nominee for your mutual funds in one go. To add a nominee, first sign up for an account if you don’t already have one. You’ll need to provide your PAN and mobile number to create an account.
Login to your account using your PAN and password, or by using OTP. On the left side of the screen, select ‘Service Request’ and then click ‘Update Nominee Details.’ You’ll see all your mutual fund investments, including all your folios linked to your PAN and mobile number. Select a specific fund and click ‘Next.’
If you want to edit an existing nominee, click on the edit symbol. If you want to add a new nominee, click ‘Add Nominee’. If you do not want to add anyone, select ‘I do not wish to nominate’.
After making any changes, click ‘Save.’ You’ve now successfully updated your nominee details for that particular folio. Repeat this process for any other folios you want to update.
It's important to choose a nominee or opt out when investing in mutual funds. Not only does it ensure that the funds are transferred to the right person in case of your absence, but it can also make the process of transmission of funds smoother. Additionally, it's important to revisit your nominations every once in a while to ensure that the details are up to date.
