One of the important requirements to start creating a mutual fund (MF) account and invest in the same is having a valid bank account. This allows you to do transactions such as purchase/redemption of MFs. Dividend credit can also be done easily through online/offline modes. Market regulator SEBI allows a maximum of five bank accounts to be attached to a single MF folio. Further, if there is any change in the bank account details, it is necessary for investors to update it with the fund house. This ensures the redemption proceeds and dividends are credited to the new operational account.

Here is a lowdown on how to update them in MF folios.

Why bank account details change

There can be multiple reasons for changes in bank account details, but the new details should be updated by the MF investors in their folios.

One, there might be instances when MF investors might feel the need to open an account in another bank or change the branch of bank (probably due to relocating to a new city). In these cases, you need to update the new IFSC code and account number in the MF folio. Two, typically when banks get merged or get acquired, the IFSC code might change. Three, bank account numbers revised because banks have migrated to core banking system.

How to update bank account in MF folio

In each of the above-mentioned cases, investors need to change or update their bank account details in their existing folio. This can be done by providing the same in the prescribed form as per the specific fund-house requirement. The application for change of bank details has to be supported by the required documents.

As per the AMFI guidelines, if details of only one bank account is to be changed, one can use the Change of Mandate form as provided by the fund house. AMFI has provided the format for this. The form also has to be signed by all the folio holders as per the mode of holding.

When bank account details change
If there is any change in the bank account details, it is necessary for investors to update it with the fund house to ensure the redemption proceeds and dividends are credited to the new operational account.

However, if changes in multiple bank accounts associated with the folio are to be made, investors need to fill up ‘Multiple Bank Accounts Registeration Form’. Here, they need to specify a particular default or primary account, from which purchase/redemption shall happen. Further, while making a redemption request, investors can specify the account where the redemption proceeds should be credited. If no account is specified, the proceeds shall be transferred to the specified default account.

One can also change the bank account details or add or delete bank accounts in case of multiple accounts by visiting the websites of Registrar and Transfer Agents (RTA) - CAMS and KFintech. Further, platforms such as MFCentral and MFUtility also provide such services. Note that while processing the request to changing bank details through MFCentral, only folios with same default bank details can be modified through a single request.

Also, one can change the bank mandate in ongoing SIP. You can download a Change of Bank Mandate Form – for SIP from the fund house website, and send it bank to the fund house after filing the details. Note that this form is only for changing bank mandate for SIP and it doesn’t change your bank account details for redemption or dividend payout. To change the bank account for dividend or redemption proceeds, one needs to follow the procedure previously mentioned — fill the Change of Bank Mandate form.

Whenever change of bank mandate request is received, simultaneously with or just prior to submission of a redemption request, fund houses or RTAs maintain a cooling-off period of 10 days. This is a precautionary move against fraudulent or unauthorised transactions. Redemption proceeds will be paid after completion of the cooling-off period.

Documentation

For each bank account that has to be added, the bank account number, type of account — savings or current, bank name, branch, city, pin code, MICR and IFSC code have to be provided. Supporting documents can be either the new bank’s cancelled cheque with the first unit-holder’s name and account number printed or a self-attested copy of bank statement or bank passbook with current entries not older than three months. A letter certifying the bank account details, duly signed by the branch manager/authorised personnel of the bank, can also be given.

Do note
Maximum 5 banks accounts can be attached to a single MF folio
Submit relevant change of bank mandate form to AMCs
MFCentral and MFUtility also help
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