Mutual Funds

Reduce the hassle when you exit

| | Updated on: Oct 05, 2014
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You cannot change your bank details when you make a redemption request

While making redemption requests, investors often request certain add-on services. Let’s look at some common requests and the formalities that need to be complied with.

I made a redemption request and asked for a change in bank details, but the details were not changed and the redemption cheque was sent with old bank details printed on it.

Mutual funds do not process requests to change bank details that are submitted at the time of redemption. Investors who have closed their bank accounts and want redemption proceeds to be credited to a new bank account should ensure they register the new bank account details in their folios well in advance. Mutual funds allow investors to register up to five bank accounts in their folios. This allows investors to choose the bank account into which the redemption proceeds need to be credited.

I had invested as a minor and now, as an 18-year-old, I have made a redemption request. However, it was not processed.

Any investment made on behalf of a minor will be locked till he/she attains the age of maturity. Transactions are not permitted in such folios till the status of the investor is changed from minor to major. Mutual Funds send advance intimation to investors informing them to register their new status in the folio. Update their status to ‘major’ by submitting new bank details along with the know-your-customer acknowledgement and an age proof. Mutual fund/registrar websites provide the required form detailing the documents required to effect this change.

I want to have all redemptions credited electronically to my account. What should I do?

Please inform the fund/registrar through a written and signed request. In your letter, please mention the IFSC/RTGS code of your bank and attach a cancelled cheque reflecting the relevant IFSC/RTGS code. The IFSC/RTGS code will then be registered in the respective mutual fund’s records and the mode of payout will be changed to electronic to ensure all payments are sent to this account electronically.

I have requested a mutual fund to “Redeem complete amount and make balance zero”. The fund has not closed the account and is debiting SIP amounts.

Please note that redemption of all units and ceasing of SIP are two different processes. If you ask for redemption of all units in a scheme, all unit balance as available on that particular date of the redemption request will be redeemed. To stop the SIP debits and further unit allotments, you need to submit a separate request three-four weeks in advance of the next SIP instalment due date.

I have units in my demat account. How can I redeem them?

You have to submit the redemption request to your broker, a trading member of the stock exchange or directly to your depository participant and the process would be effected through the stock exchange/ depository. The redemption proceeds will be credited directly to your registered bank account.

Contributed by CAMS Viveka, an investor education initiative from CAMS

Published on October 05, 2014

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