Nominations in mutual funds makes transmission easy for the heirs in the event of the unitholder’s death.
Existing regulatory guidelines make it mandatory for new folios/accounts opened by an individual in a single name to make a nomination. In case investors do not wish to nominate, they can explicitly opt out and need to confirm the same in the application form.
Now starting June 2025, a new format of the nomination form must be used and is available on websites of all mutual fund houses, mutual fund registrars and Association of Mutual Funds of India (AMFI). There are some additional details an investor has to mention in the new form:
- Investors have to mandatorily provide the following details for each nominee:
- Full Name
- Relationship with the investor
- Percentage of share
- Address
- Email ID
- Mobile Number
Additionally, an investor has to provide any one of the following identity details of the nominee:
- PAN
- Driving License Number
- Last 4 digits of Aadhaar
- Passport Number
If the details are incomplete there could be delays or rejections and the form could be rejected. An investor has to merely provide these details in the form and no proof of any documents is required while making these nominations.
2. An investor presently can add up to 3 nominees in a folio. From September 1 2025, an investor will be able to add up to 10 nominees in a folio.
There is no restriction on the number of times an investor can add/change/remove nominees.
Also, upon the demise of the investor the nominees shall have the option to either continue as joint holders with other nominees or for each nominee(s) to open separate single account / folio. If some nominees don’t claim their share, the unclaimed portion stays with the AMC in case of mutual funds or depository in case of demat accounts.
3. Another major addition to the format is the facility to authorize any of the registered nominees to operate the folio or demat account in case the investor becomes physically or mentally incapacitated. This can be helpful to investors in unfortunate medical conditions.
What should existing investors do?
Note that it is not mandatory for existing mutual fund investors, who have a nomination in their folios, to make any changes now.
How can a nomination be done in mutual fund folio?
Completion of the nomination is simple and can be done online through RTA (registrar and transfer agent) websites or fund house websites. For those not keen to do it online, one can use a relevant physical form, sign it and send it to the fund house.