Mutual Fund Nomination: How to Add or Change Nominee in Mutual Funds Online?

A nominee in a mutual fund account is a person designated to receive the investments after the investor’s death. Investors can add up to three nominees and update them at any time via online or offline channels.

Key Highlights:

• Nominees can be added, updated, or changed at any time via online or offline processes.
• Investors can add up to three nominees to a mutual fund account as per SEBI guidelines.
• Minor and NRI nominees are allowed, subject to guardian details and applicable regulations.

What is Nominee in Mutual Fund?

Nomination in a mutual fund refers to the process of appointing one or more individuals to 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 clarify the transfer of your investments. 

Without a nominee, claiming your saved assets can become a difficult process for your loved ones, potentially leaving your money inaccessible if your investments transfer to unclaimed assets. 

SEBI Rules for Mutual Fund Nomination

When adding a nominee to your mutual fund 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 fund account, the nominee must satisfy the following conditions:

• Individuals Only: A nominee can be any natural person, including a family member or any other individual. Companies, partnership firms, Hindu Undivided Families (HUFs), societies, and non-charitable trusts cannot be nominated.
• Minor Nominees: A minor can be appointed as a nominee. However, the investor must provide the name, address, and details of the minor's legal guardian, who will manage the investment until the minor attains age 18.
• NRI Nominees: Non-Resident Indians (NRIs) are eligible to serve as nominees, subject to applicable Reserve Bank of India (RBI) and foreign exchange regulations.
• Religious or Charitable Trusts: Religious or charitable trusts can be nominated. Additionally, nominations can also be made in favour of the Central Government, State Government, local authorities, or a person designated by virtue of their office, wherever permitted.
• Maximum Number of Nominees: Investors can nominate up to 3 nominees for a single mutual fund folio and specify the percentage share for each nominee. The total allocation must add up to 100%.

How to Add a Nominee in Mutual Funds?

You can add a nominee to your mutual fund investment either online through your AMC or investment platform or offline by submitting a nomination form.

Online Method

Adding a nominee online is quick and usually takes a few minutes. It can be done through NSDL, CDSL, or any registered broker or Depository Participant (DP).

Step 1: Start by logging in to your broker or DP account using your registered details, such as PAN, mobile number, or client ID.

Step 2: Go to the account settings or service section and look for “Nominee”, “Add/Update Nominee.”

• NSDL users can use the NSDL e-services portal
• CDSL users can access nomination through the Easi/Easiest platforms
• Broker apps usually keep it under profile or account settings

Step 3: Enter your basic details such as DP ID, client ID, mobile number, mail ID, and PAN. You will receive an OTP on your registered mobile number or email for verification.

Step 4: Select whether you want to add a nominee or opt out of nomination. Adding a nominee is strongly recommended to ensure a smooth transfer of investments in the future.

Step 5: Fill in the nominee’s details carefully, including name, date of birth (mandatory if the nominee is a minor), relationship, and contact details. If adding more than one nominee (up to three allowed), you can also assign a percentage share.

Step 6: Complete E-Sign Verification by authenticating the request using Aadhaar OTP, PAN-based verification, or your platform’s e-sign process. Accept the declaration and proceed.

Step 7: Enter the final OTP to confirm your request. Once submitted, the nominee details are updated and linked to your account, usually instantly or within a short processing time.

Offline Method

Investors who prefer physical documentation can add a nominee by visiting the AMC or Registrar and Transfer Agent (RTA).

Step 1: Obtain the Mutual Fund Nomination Form from the AMC office, RTA, or download it from the AMC's website.

Step 2: Fill in the folio number and complete the nominee details, including the nominee's name, relationship, address, date of birth (for minors), and guardian details (if applicable).

Step 3: Mention the percentage share for each nominee if you are appointing multiple nominees. Ensure the total allocation equals 100%.

Step 4: Sign the nomination form as per the registered mode of holding (single, joint, or anyone/survivor).

Step 5: Submit the completed form along with the required supporting documents, if any, at the AMC branch or RTA office. After verification, the nominee details will be updated in your mutual fund folio.

How to Update or Change the Mutual Funds Account Nominee?

As an investor, you have the liberty to modify the nominees in your demat account as per your preference. The process is simple and hassle-free, and you can change your nominees at any time using the following steps, these steps can be applicable regardless of whether the request is made online or offline.

Step 1: Access your mutual fund account through the online portal or visit the nearest AMC or Registrar and Transfer Agent (RTA) office.

Step 2: Select the option to add, update, or change the nominee and choose the relevant mutual fund folio.

Step 3: Provide the updated nominee details, including the nominee's name, relationship, date of birth, address, and guardian details for a minor nominee.

Step 4: Verify the information, complete the required authentication or sign the nomination request form, and submit it.

Step 5: Once the request is processed and verified, the updated nominee details will be reflected in your mutual fund folio, and you will receive a confirmation from the AMC or RTA.

Why Should You Add a Nominee to Your Mutual Fund?

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

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

Conclusion

Adding a nominee to your mutual fund account is a simple but important step in protecting your investments. It ensures that your savings are transferred smoothly to your chosen beneficiary and helps reduce delays, paperwork, and legal complications during difficult times. 

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

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