Many investors are investing in mutual funds via the SIP route to achieve their financial goals and to create wealth. With India growing at a fast pace, investors can expect their money to grow by leaps and bounds in the long term. Recently, Finance Minister Nirmala Sitharaman unveiled a plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders.
Many investors have their accounts in these banks and with the merger their name, account number, IFSC code etc. is expected to change. Investors are in a dilemma as to how to go about with the changes. If there is any change in the bank accounts, then the mutual fund company needs to be informed immediately so that there is no payout delays.
Mutual fund investors need to provide their bank details to the mutual fund companies to conduct various financial transactions like redemptions, purchases, dividend receipts etc. These details are mandatory at the time of opening the accounts. If there is any change in the bank account details, then the same has to be informed to the mutual fund company immediately so that there are no payout delays.
To make things simpler for the investors, mutual fund companies offer the facility where individual investors can register upto five multiple bank accounts. Investors can avail of this facility either at the time of opening an account or after making an initial purchase. All that you need to do is fill the multiple bank account registration form. An important point to note is that the first or sole unit holder, should be one of the holders of the bank account that is being registered.
Details to be provided to avail this facility
If you are an existing investor of the mutual fund company, then you just need to provide the folio number. New investors will need to provide the application form number along with the Permanent account number (PAN) of the first holder has to be provided to link the bank accounts to the investor. At the time of adding different bank accounts, it is mandatory to provide the bank account number, type of account, bank name, branch, city, pin code and IFSC code. Along with the above details you need to provide a cancelled cheque with the name of the first unit holder printed on it or a bank statement reflecting the name of account holders, account number and address or passbook page reflecting the account number, name and address of the account holder. The form needs to be signed by all the folio holders as per the mode of holding.
After that, you need to specify one of the registered bank accounts as the default bank account (which the mutual fund company will credit future redemption and dividend proceeds). The investor can change the default bank account at any given point of time by using the same form. Investors can also add multiple accounts or delete bank accounts to the folio at any time within the limit of five bank accounts.
Redemption of units
In case a change of bank mandate request is received by the mutual fund company, simultaneously with a redemption request, then the account to which the credit has to be made should be specified in the redemption request. Suppose the bank account to which the credit has to be made is not specified clearly in the redemption request then the credit will be made to the default bank account. After the cooling off period of 10 calendar days, this bank account will become the default bank account for all future credits unless otherwise specified.
