Month: May 2018

Why an MF Investor Should Appoint a Nominee?

Why an MF Investor Should Appoint a Nominee?

Nomination facility is offered for the transfer of mutual fund units in case of the unfortunate demise of the unit holder
What is nomination for mutual fund investors?
Nomination is the process of appointing a person to take care of the assets in the event of the investor’s demise. A nominee can be any person — spouse, child, another family member, friend or any other person you trust. Nomination facility is mandatory for new folios/accounts opened by individuals with single holdings. In case of joint holdings where there are more than one holders, it is not mandatory to have a nominee, but financial planners recommend that new folios should always have a nominee.

What if an investor does not wish to appoint a nominee?
If the investor does not wish to nominate, he must sign and indicate the same by signing on the requisite space.

How does a mutual fund investor make a nomination?
When you invest in a mutual fund, there is a column where you can fill the details of the nominee. Individuals holding accounts either singly or jointly can make nomination. But non-individuals including society, trust, body corporate, karta of Hindu undivided family (HUF), holder of power of attorney cannot nominate . Nomination for joint holders is permitted, but in the event of the death of any of the holders, the benefits will be transmitted to the surviving holder’s name. Only in the case of death of all holders will the benefits be transmitted to the nominee.

How many nominees can an investor appoint?
An investor has an option to register up to three nominees in a mutual fund folio. The investor can also specify the percentage of amount that will go to each nominee in case of his death. If the percentage is not specified, each nominee will be eligible for an equal share.

What are the benefits of appointing a nominee for your MF investments?
When a nomination is registered, it facilitates easy transfer of funds to the nominee(s) in the event of demise of the investor. However, in the absence of nominee, the heirs/claimant will have to produce a number of documents like a will, legal heir certificate, no-objection certificate from other legal heirs etc to get the units transferred in his/her name.

Is it possible to change a nominee once an investment is made?
Yes, the nominee can be changed/added/subtracted any time as per the investors wish.

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Steps to secure your child’s future using mutual fund

Steps to secure your child’s future using mutual fund

When it comes to future of your child, you do not think twice. You will do whatever it takes. You can build it brick by brick and one step at a time without hurting your finances. Mutual Funds are a way to go.

Here are 5 steps to secure your child’s future with mutual funds

1. Set Goals

Know the purpose you wish to save for and invest the money accordingly. It could be an international school admission or a professional degree at a university. Set your sight on a figure that will ensure your child gets the education he or she wants.

2. Save First

Once you know your goals, set aside some money before you spend the rest. It is important to get into a good savings habit every month as this is the stepping stone to your child’s secured future.

3. Start with SIPs

A way to get into a discipline of investing is by using SIPs. Systematic investment plans or SIPs help you in ‘rupee cost averaging’. This means you buy more units when markets fall and lesser units when markets rise. You can start with as little as Rs 500 every month.

4. Use SIP Top Up

As your income grows, you could boost your allocation to SIPs by using the SIP top up. This increases the amount you set aside each month for your child’s future. A timely top up can make a significant difference to the final amount you receive when you need it.

5. Do not stop investing

You must continue with your monthly MF investing habit till you meet your goals. If you stop investing for some reason, figure out a way quickly to replenish the child education kitty. The more you stay away, the more you hurt your prospects of reaching your goals on time.

It makes sense to allocate your SIPs into diversified equity funds. You money grows along with your child. To reap the benefit, you need to give your money that much time.

Using SIP Calculator, To prepare a plan and illustration of your investment. Download Mobile app from

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Systematic Withdrawal Plan (SWP)

Systematic Withdrawal Plan (SWP)

What is Systematic Withdrawal Plan (SWP)?

A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw money from an existing mutual fund at predetermined intervals. Systematic withdrawal plans are used by investors to create a regular flow of income from their investments. Investors looking for income at periodical intervals usually invest in these funds. Often, a Systematic Withdrawal Plan is used to fund expenses during retirement.

Systematic Withdrawal Plans is of advantage to investors who require liquidity as it allows account holders to access their money exactly when they need it. This makes it easier for the account holders to carry out their financial plans and meet their goals.

How does SWP work?

When you want to sell mutual fund you usually have two options either sell all at once or opt for a Systematic Withdrawal Plan. Systematic Withdrawal Plan, allows you to withdraw a fixed sum of money every month or quarter depending on the option chosen and instructions given by you.

As per your instructions the Mutual fund will redeem an equivalent amount of mutual funds from your account as per the prevailing Net Asset Value (NAV). This process helps investor to get a fixed amount of money every month or quarter.

Let’s understand this process with the help of an example:-

Let’s say you have 5,000 units in a Mutual Fund scheme. You have given instructions to the fund house that you want to withdraw 8,000 every month through SWP. Now let’s assume that on 1 December, the Net Asset Value (NAV) of the scheme is 20.

Equivalent number of MF units = 8,000 / 20 = 400
400 units would be redeemed from your MF holdings, and 8,000 would be given to you.
Your remaining units = 5,000 – 400 = 4600
Now say, on 1 January, the NAV is Rs. 21.
Equivalent number of units = 8,000 / 21 = 380
380 units would be redeemed from your MF holdings, and 8,000 would be given to you.
Your remaining units = 4600 – 380 = 4220

In this way, units from your mutual fund holdings are redeemed in a systematic way to provide you with continuous income.

What are types of SWP’S?

Under SWP, withdrawals can be fixed or variable amounts at regular intervals. These withdrawals can be made on a monthly, quarterly, semi-annual or annual schedule. The holder of the plan may choose withdrawal intervals based on his or her commitments and needs.

SWP is usually available in two options:

Fixed Withdrawal: Under this you specify amount you wish to withdraw from your investment on a monthly/quarterly basis

Appreciation Withdrawal: Under this you can withdraw your appreciated amount on a monthly/quarterly basis

Using SIP Calculator-SWP Calculator, To prepare a plan and illustration of your SWP investment. Download Mobile app from

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Home loan closure checklist

Home loan closure checklist

1) Refer to the ‘list of documents to submit’ when making the application for a loan, and make sure that all the original documents are recovered.

2) Ensure that the documents are complete and received in good condition, in the presense of a bank official, before signing the acknowledgement.

3) Take an NOC from the lender, specifying the address of the property against which loan was taken, name of the borrower and the loan account number.

4) Request the lender to inform CIBIL regarding the closure of the loan account. The process should take about 30 days from date of loan closure.

5) Ensure that any lien is removed after the closure of the loan. An existing lien will create problems during the sale of the property.

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