The Securities and Exchange Board of India (SEBI) has announced an extension of the deadline for mutual fund account holders. They now have time until January 1 to nominate a beneficiary or opt-out by submitting a declaration form.
Previously, the deadline for existing mutual fund holders to make their nomination choice was set for September 30.
Mutual Fund Nomination Process: A Step-by-Step Tutorial
Mutual fund investors can nominate a beneficiary or opt out of nomination by reaching out to their mutual fund management company or registrar and transfer agent (RTA). Alternatively, they may complete these actions online through the mutual fund management company’s or RTA’s website.
For the online method, follow these steps:
1. Go to NSDL’s portal.
2. On the homepage, locate and click on the ‘Nominate Online’ option.
3. Provide your DP ID, client ID, PAN, and submit the OTP.
4. Choose either ‘I wish to nominate’ or ‘I do not wish to nominate.’
5. If you select ‘I wish to nominate,’ a new page will open where you can enter the nominee’s details.
6. On the e-Sign Service Provider’s page, check the box and click on ‘Proceed.’
7. Confirm OTP.
What is the benefit of Mutual Fund nomination?
Nomination allows a mutual fund investor to select a person who will inherit their mutual fund units if they die, with the flexibility to choose a family member or close one.
However, if an investor chooses to opt out of nomination, it means they have decided not to appoint a nominee. In such cases, the investor’s legal heirs will be entitled to receive the mutual fund units in the event of their demise.
What if you miss the deadline for Mutual Fund nomination?
If an individual mutual fund unit holder fails to nominate or opts out of nomination by September 30, 2023, their mutual fund folios will be frozen for debit transactions. Consequently, they won’t be able to redeem their mutual fund units or make changes to their investment portfolios.