A mutual fund is getting more and more popular these days. People are getting more aware of mutual funds and for your easy-going here are things that every new mutual fund investor should know.
When you invest in mutual funds, KYC is important. KYC stands for Know Your Customer. This includes your personal information like your name, contact no., address, PAN card no. And Aadhar card no. Are mandatory. Your investment process will only be completed if your KYC is done.
Bank account details are important because when a pre-decided amount will deduct from your bank account automatically. An investor using a bank account that you intend to continue with it. Many times investors opt for their salary account for their convenience. But when they change the job, they may find it difficult to continue with the old bank account. Though you can add another bank account to the mutual fund folio.
Make sure your email ids and mobile numbers are correct at the beginning. Mention a mobile number and email id that you intend to continue and that is very important.
An investor does not sign for a SIP every day. Many investors, look at their investments once a year. Worse, some just forget their investments. If you have got the communication lines open, the mutual funds will keep updating you about your investment.
When you are filling up your application form, read the instructions carefully. An insignificant-looking error may reject your application by the fund house. These errors may be the wrong choice of scheme options, non-submission to the amount of limit, not keeping the cheque writing norms. The list is very long. The mutual funds reject such applications as ‘not in good order’ or ‘NIGO’. Check your form thoroughly before submission using the checklist at the end of the application form.
When you are filling up the form, never skip the nomination box in the form. The nominee can be anyone, you can mention the name of the nominee and the share of your investments. The nominee can be more than one and state their shares. Note nominee’s nominees' role comes only after the death of the investor. You can change the nominee by submitting a simple form afterward. You should never tick the ‘I do not want to appoint nominee’ checkbox, just to complete the form. This extra time spent is worth it. Do nominate.