How to Add a Nominee in Mutual Funds Online?

Adding a nominee to your mutual funds account is a crucial step in securing your investment. It ensures the smooth transfer of your wealth to the right person in case of any unforeseen circumstances without having to go through legal hassles and complex paperwork. 

What is Nomination in Mutual Fund Account?

Nomination in a mutual fund account refers to the process of appointing a person or multiple individuals who will receive the funds or investments held in a demat account in the event of the investor's demise. 

It is a way to safeguard your financial assets and provide clarity on the transfer of your investments. Without a nominee, not only can your loved one find it difficult to claim your saved assets but the money could be stuck in your account indefinitely. 

Importance of Adding a Nominee in Mutual Funds Account 

Adding a nominee to your mutual funds account is crucial for several reasons. 

• Firstly, it ensures that your investments are passed on to the right person according to your wishes, avoiding any legal disputes. 
• Secondly, it streamlines the process of transferring funds and reduces the administrative hassle for your loved ones.
• Lastly, it provides financial security to your family members, especially in the absence of your support.

How Many Nominees can be Added to Mutual Funds Account? 

As per the regulations set by the Securities and Exchange Board of India (SEBI), an investor can add up to three nominees to their mutual funds account. These nominees can be individuals, including family members or dependents.

Mutual Fund Account Nomination Rules 

When adding a nominee to your mutual funds account, it is essential to understand the nomination rules set by SEBI. 

• Firstly, the nominee should be an individual and not an institution or organisation.
• Secondly, if the investor is a minor, a guardian must be appointed as the nominee until the minor reaches the age of majority.
• It is important to provide accurate and complete details of the nominee, such as their name, date of birth, contact number, and address.

Eligibility Criteria for Nominees 

To be eligible as a nominee in a mutual funds account, the following requirements are to be met:

• It is possible to nominate any person, including a minor. The only exceptions are companies, partnership firms, Hindu Undivided Families (HUFs), societies, or trusts that are not religious or charitable.
• If the nominee is a minor, the customer making the nomination must provide the name and address of the minor nominee’s guardian.
• NRIs can also be nominees, subject to the exchange control rules in force at the time.
• A nomination can also be made to the Central Government, any state government, local authority. It can also be made to any person designated by virtue of their office, or a religious or charitable trust.

How to Add a Nominee in Mutual Funds Online?

Adding a nominee to your mutual funds account online is a simple and convenient process. Follow these steps to add a nominee:

1. Go to the NSDL website.
2. Click on the 'Nominate Online' option on the homepage.
3. You will be redirected to a new page where you have to provide your DP ID, client ID, PAN, and OTP.
4. Once you have entered the required details, pick either 'I wish to Nominate' or 'I do not wish to nominate.'
5. In case you choose to nominate someone, a new page will appear, asking for the nominee's information.
6. On the eSign Service Provider's page, make sure to check the checkbox and then click on 'Proceed.'
7. Finally, complete the nomination process by verifying the OTP.

How to Update/Change Mutual Funds Account Nominee?

As an investor, you have the liberty to modify the nominee(s) in your demat account as per your preference. The process is simple and hassle-free and you can change your nominees anytime. 

All you need to do is fill out a nomination form and submit it to your Depository Participant (DP). Alternatively, you can also opt for the online process to make the necessary changes. This gives you the flexibility to update your nominee(s), making it easier for you to manage your investments effectively.

Benefits of Adding Nominee to Mutual Funds Account

Adding a nominee to your mutual funds account offers multiple benefits. 

• Firstly, it ensures the hassle-free transfer of investments to the nominee, avoiding any legal complexities.
• Secondly, it provides financial security to your family members in case of your unfortunate demise.
• Moreover, it simplifies the claims process for your dependents, making it easier for them to access your funds.

Also Read About:
Types of Mutual Funds
Mutual Fund Calculator
How Mutual Funds Work in India With Example
Direct vs Regular Mutual Fund

Related Article:
1. Nominee in Bank
2. Nomination in Demat Account