I have invested in a few mutual funds along with my wife as the joint holder with Anyone or Survivor . As both of us are senior citizens now, I want to add my son as a third holder with the same status of Anyone or survivor in the same folio. Birla Mutual Fund is not allowing the addition of a third holder in the same folio. Instead , it has asked me to open a new folio with 3 joint holders, redeem my existing investments and reinvest in the new folio. This will unnecessarily impact my holding period as I have invested in some debt schemes for more than 3 years. The addition of a third holder becomes important , especially on the demise of the first / second holder. Please advise the correct route to be adopted by investors. Nomination is not of much practical use as I have come across quite a few cases where the nominee has to go through an exhausting administrative process.
- G Subramaniam
You cannot add joint holders to your existing folios. However, redeeming your funds for this reason is not a wise option either. Therefore, though the nomination route has some administrative processes to be followed, if you have all your paperwork in place, it is your best bet. These administrative processes has to be followed even in case of death of one of the joint holders. The death of either account holder has to be informed to your mutual fund company and/or Depositary Participant (DP) to ensure that the accounts are up to date with all relevant information. Please note that in case of death of a joint holder, the units will have to be redeemed in case you want to make any changes like adding a joint account holder.
The person who has been registered as a nominee will have to provide proof to make claims on the investment. He/She will have to submit an attested copy of the death certificate, along with the following documents:
1. Proof of identity of the nominee
2. Declaration and indemnity against any other claim, if the amount is Rs 1 lakh or more.
3. A copy of the account statement issued by the asset management company (AMC).
4. Bank account details of the new unit holder, along with attestation by a bank branch manager or a cancelled Cheque with the account holder's name.
5. Know your customer (KYC) form of the claimant.