Register many accounts

Mutual funds have recently given investors the facility to register multiple bank accounts in their folios. We answer investor queries on this facility.

I would like to add an additional bank account in my folio to enable me to choose the account into which payments should go. Can this be done?

Mutual funds now offer a facility to individual investors to register up to five bank accounts in a folio. Investors have to specify any one bank account as the “Default Bank Account” and can register up to four additional bank accounts.

To register additional bank accounts, investors would have to fill the registration form. Forms are available at the mutual fund websites / CAMS Service centres.

Investors would have to attach a cancelled cheque leaf with their name and account number printed therein, or a copy of the bank pass book, or a statement of bank account containing the name and address of the account holder and account number.

The copy should be certified by the bank manager with his / her full signature, name, employee code, bank seal and contact number.

Why should I opt for this facility?

Registering for this facility enables you to receive redemption proceeds into any one of the registered bank accounts of your choice without having to provide bank details and the supporting documentation at the time of redemption.

Besides, many mutual funds now have a cooling period before payout of redemption proceeds, if an investor opts for a change in bank details at the time of redemption. Some funds do not process such changes if requested along with redemption.

Additionally, registered bank accounts may also be used for verification of pay-ins (i.e. receipt of subscription funds) to ensure that a third party payment is not used for a mutual fund purchase. We have, in an earlier article, discussed the rule regarding third party payments.

Payments made from bank accounts not held by the first holder or sole holder, are referred to as “Third Party Payments” and such applications are not processed.

Please explain what is meant by “Default Bank Account”?

At the time of registering multiple bank accounts, investors have to specify any one bank account as a “default” bank account.

This account is used for crediting the redemption proceeds if investors do not specify the bank account in the redemption request.

Dividend proceeds, if any, are processed into the default bank account only.

Can I delete one or more of the bank accounts registered in my folio?

Yes. You may submit a request specifying the bank account to be deleted from your folio.

In case the default bank account has to be deleted, please specify the bank account to be treated as “default”.

Can I just replace the default bank account with another bank account already registered in my folio?

Yes. You would have to fill in the relevant portion of the Registration form to change the default bank.

(Contributed by Investor Education Team of CAMS. The views expressed are general practices in the mutual fund industry and may vary on a case-to-case basis.)

COMMENT NOW