You can either change your bank account or add another bank account to your mutual fund folio.
Going by the month-end mutual fund flow figures released by the Association of Mutual Funds of India in August, many investors seem to have taken profits off the table from equity funds. While most investors get redemption proceeds directly credited to their bank accounts, some of us get cheques. Whether you submit the redemption request using the paper or the online route, the fund house processes it and transfers the amount online to your bank account. In cases where the fund house sends a cheque, they do so by clearly specifying your name, bank details and account number on it. This is to avoid any fraudulent encashing of the cheque.
Change in bank accounts
Every time you change jobs, you may end up opening a new bank account. In such a case, you do not tend to use your old accounts, before you close them eventually. But you might have forgotten that you would have linked such bank accounts to some old investments.
Here’s what you need to do avoid unnecessary hassles.
A fund house typically asks you to either change your bank account or add another bank account to your mutual fund folio.
To change your bank account details, you have to fill up the ‘change of bank account form’ and submit it to the fund house or to the registrar and transfer agent (RTA). You need to submit any one of: cancelled cheque with pre-printed name, bank statement or bank passbook or banker’s certificate for both the old bank (closed) and new bank accounts that you want to add. If you attach these documents along with the duly filled form, then the new account is added and the old account is removed.
Problems arise when you do not have any record of your old bank account. For example, in case the bank in which you had an account goes into liquidation or merges with another bank, then it may be difficult to obtain a banker’s certificate.
In such a case you can go for addition of bank account. You can add a bank account by filling up the multiple bank accounts registration form. You need to submit any of the four proofs mentioned earlier as documentary evidence. The same need to be attached with the form. You can add up to five bank accounts to a mutual fund folio. After you submit the form, you have to select the default bank account. The form also provides for the deletion of existing bank accounts associated with the mutual fund folio.If you complete either of the processes above, then after ten days the new details get reflected in your mutual fund folio. You get a statement to that effect. You can then ask the fund house to pay redemption proceeds in the newly designated bank account.