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How to Add Nominee in Mutual Funds Online?

Mutual funds are known to provide substantial returns which makes them attractive for investors. 

But what happens to these investments when the investor passes away?

As per the new SEBI guidelines, for any existing or new investment in mutual funds, you need to add the details of the nominee. 

This ensures that an investor’s mutual funds are transferred to a family member.

In this article, we will help you with how to add nominee in mutual funds online. 

What is a Mutual Fund Nomination?

Mutual fund nomination is a process that allows a unit holder to designate a loved one to receive their units in the event of the holder’s death.

Nominating a family member ensures that mutual fund investments are passed on to them, thereby securing their financial future.

You can add a nominee while registering for a mutual fund. In fact, it’s one of the most crucial steps to complete before buying your first mutual fund.

This nominee can be someone from your family members such as your parents, spouse, or children. Nominees are one type of trustee of the assets. 

If the mutual fund units are jointly held by more than one investor, then both investors must nominate a person jointly. 

This person would receive the mutual fund units in case of the death of the unit holders. 

Why Should You Add a Nominee?

Passing down assets is a common practice across the globe. The reason why people do it is to protect their investments and leave wealth for family.

When someone works hard to accumulate wealth, especially in assets like mutual funds, they would want it to be transferred to loved ones in case of an untimely death. 

That’s precisely why it is important to a nominee in mutual funds. Furthermore, adding a mutual funds nominee is mandatory as per SEBI. 

If the nominee is added then the transfer of investment is very smooth, without any delay. 

It avoids legal disputes and lengthy processes arising due to an investor’s death. 

The overarching logic is to develop a clear line of transfer of ownership, which is for mutual funds in this case, to a rightful heir/family member.

Criteria for Nomination in Mutual Funds

The SEBI guidelines have specified who can and cannot be the nominee of the mutual fund units. 

Any person can be added as the nominee by the investor. A nominee can be minor too. However, it is not mandatory to be a relative or legal heir. 

When the nominee is minor, details will be required about the name and address of their guardian. An investor can also add an NRI as the nominee. 

Central Government, State Government, or some local authority can also be nominated by an investor. 

The following parties have been disqualified from being included in the nomination of mutual funds:  

  • A Partnership Firm 
  • Trust (Except a religious or charitable trust) 
  • HUF 
  • A company or corporate body
  • A society 

What Happens If You Don’t Add a Nominee to Mutual Funds?

SEBI has recently extended the deadline for adding a nominee to 30th June 2024.

So, the mutual fund investors will need to provide nominations for their mutual fund units or select the opt-out option by 30th June 2024. 

SEBI guidelines state that if you don’t add a nominee or don’t select any option then there are consequences of this. 

The mutual fund folios of such investments will have a freeze. The investors won’t be able to sell their mutual funds in their folios. 

This rule applies to all mutual fund holders. This includes even those having mutual funds with joint holders. 

If you do not wish to nominate anyone, you need to communicate the same with the fund house.

How to Add Nominee in Mutual Funds Online 

Now let’s understand how to add nominee details in mutual funds online in Dhan app: 

  1. Firstly, you need to go to “My Profile”. 
  2. Then you need to go to “Profile & Account Details”. 
  3. Here you will have the option of “Add Nomination” at the bottom of the screen. 
  4. Ensure that you have updated the Dhan app before adding the nomination. 

Conclusion

The above article clears your doubt about nominee addition in mutual funds. The process is quite easy and it can be done in a few minutes. 

Having a nominee for your mutual fund can secure your investment and help your family avoid legal battles in case of any unfortunate event. 

Adding a nominee ensures that money goes to your loved ones and can help them financially on your behalf. 

FAQs

Q. How do you nominate a mutual fund?

You can nominate for your mutual fund through an online or offline process. For the online option, you need to log in to the account and add nominee details. For the offline process, you need to visit the fund house’s branch and fill out the form. 

Q. Can we add a nominee online?

Yes, we can add the nominee online. For this, you will need to go to the relevant app or online portal where you hold the mutual fund units. There you need to provide details about the nominee you want to add and get the nominee added. 

Q. How do I know if my mutual fund nominee is added?

To check whether the nominee has been added to the mutual fund or not, you can check online or ask for details from AMC. The MF statement shows whether the mutual has the nominee or not. 

Q. What is the revised date of the nominee’s addition to mutual funds? 

As per SEBI the revised date for nominee addition to the mutual funds is 30th June 2024. 

Shriram Shekhar

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