How to add, remove joint holders in mutual fund folio

There could be circumstances where an investor who has a single holding in a mutual fund account or folio wants to add one or more joint holders.

There are also situations where an investor wants to convert a joint holding account into a single holding one.

There was a specific query from a BusinessLine subscriber about how to convert a joint holding mutual fund account into a single holding one. Before we get into the procedure, there are a few points to keep in mind.

This is still a grey area in the mutual fund industry and there is no standardised process to make such changes.

We spoke to a few mutual fund houses to find out the current industry practice.

Also, the change can be done only through the physical mode at the mutual fund’s office. Investors should contact the customer service team of the asset management company.

Joint to single

Conversion of a joint holding account into a single holding account is possible under two circumstances in general.

The first situation is if one or more of the joint holders have died. This is called removal of joint holder by operation of law.

In this case, the surviving holder of the mutual fund account has to fill a form and attach a copy of the death certificate along with the form.

The fund house will process the request, and the name of the joint holder(s) will be deleted after due diligence.

The other situation is where a joint holder’s name can be removed through a court order. This could be for any reason.

Based on the court order, the fund house will distribute the units under the folio to the joint holders.

The order may specify the proportion in which the units have to be distributed among the joint holders.

In any other circumstances, the investor will have to make the case to mutual fund houses on the genuineness of their situation.

Single to joint

This process is a little tricky. Generally, it is better to open an account or a folio with a mutual fund with the joint holder’s name mentioned in the form at the initial stage itself.

If not, one way out to add joint holders is to open a joint demat account and then give a request to the fund house to convert the units into dematerialised form. As such, mutual fund units are not transferable in physical form.

And unless specifically converted into dematerialised form, mutual fund units are considered to be in physical form.

If investors do not want to follow this method, they will have to get in touch with the customer service at the mutual fund house. The AMC will have to come up with an ad hoc process based on the bona fides of the situation.

Another easier way out for this is to add the second person as a nominee in the mutual fund account or folio instead of converting it to joint holding.