1. Tax consequence
Monday, October 22, 2012
Query: Can I redeem my SIP money before the tenure?
Yes, you can redeem your units purchased in sip mode in all mutual fund schemes, except the one invested in ELSS or Pension Plan scheme of mutual fund. All SIP installments in ELSS and Pension funds have a three year lock-in period.
Before redeeming all units which are invested in sip mode, you have to consider following facts that may affect your returns
As said above you can redeem all your units which are purchased in sip mode, but, when you are cashing-in your mutual fund units, there are a couple of factors to consider that may affect if investment is made in sip:
1. Tax consequence
If investment is made in sip mode, each and every sip has to complete one year, if you sell units before completing of one year and If your mutual fund has realized significant capital gains in the past, you may be subject to capital gains taxes that is short term capital gains.
2. Exit load
If you are an investor who holds a fund that charges a back-end load, the total you receive when redeeming your units will be affected. If your fund has a back-end load, charges will be deducted from your total redemption value. For many funds, back-end loads tend to be higher when you liquidate your units earlier rather than later, so you need to determine if liquidating your units now is optimal. Information about applicable loads in mentioned in account statement, so before redeeming, please check all the details and applicable loads.
Friday, October 19, 2012
Thursday, October 18, 2012
Query of Blog Reader: change in ongoing sip bank details
I have registered an SIP with auto debit. I wish to change the bank from which the amount is being debited as very recently i have changed my job, so now i want to switch my sip to my new salary bank account. Is this possible?
Yes, it is possible to make changes in your SIP bank account.
In order to make changes in your bank account, you need to select the ‘Change bank mandate' option in the auto-debit form and submit it at the mutual fund's branch.
Important point here to note is in this process of change in bank details
1. You are cancelling your existing sip and registering new sip in the same mutual fund scheme.
2. For making changes you need to use "SIP Auto Debit/ ECS Form" and in that form click the option for change in bank details.
3. In this process you require SIP Auto debit form and not Multiple Bank Accounts Registration Form.
4. Some mutual fund houses want SIP Cancellation Form + SIP Auto debit form (with subject Change in bank details on top of application form) and where as some fund houses only ask you sip auto debit form and in that click option change in bank details, along with original cancelled cheque of new bank account (make sure, your name is printed on cheque, if name is not printed on cheque leaflet then along with cancelled original cheque you have to submit any one of following document:
- Copy of Bank Statement of recent 3 months, or,
- Copy of Bank pass book containing account number , account holder’s name & address.
6. It will take approximately 30 days to effect the change, and for debits to go to the new bank. The reverse of the SIP auto-debit form contains instructions on the requirements to change the auto-debit bank.
7. Some funds have a separate form which can be used for the purpose. Investors may fill in the new bank details in this form and clearly indicate that it is for changing the auto-debit bank.
Monday, October 15, 2012
Where to check your New KYC Status
For more details Refer:
KYC Update - IF Process done prior to 1st Jan 2012
Sunday, October 14, 2012
Query of Blog Reader: Cancellation of SIP in midway
I had enrolled for SIP in mutual fund scheme for 36 months. I have completed only 10 months. At this point is it possible to cancel the SIP?
Do I lose any money because of this?
How to cancel my ongoing sip?
Whether i have to pay any charges or penalty for discontinuing the SIP in midway??
I have online access to my mutual fund scheme, whether i can apply online to cancel my SIP, as i am not finding any option online?? (my current sip is created off-line means by submitting sip auto debit form)
I need your help in drafting letter for cancellation of sip if online option is not available for termination of my sip.
Please help me as how to proceed?
Yes, you can cancel your ongoing sip after 10 months and before 36 months as SIP is a voluntary investment, the AMC cannot levy any charges or penalty for discontinuing the SIP midway.
Important point here is that discontinuation request should be given at least 30 days prior to the next due date of SIP. (some mutual fund houses take 45 days prior notice, as period differ from AMC to AMC)
Suppose your sip date is 5th of every month and you have given request on 15th of this month(October), so in this case, sip for November will get debited (deducted) from your bank account, but their will not be any deduction in month of December.
Do you lose any money if you cancel sip before the tenure?
No, AMC don't charge you anything, but, if along with cancellation of sip, you withdraw (redeem all units), then in such case amc may charge exit load, if applicable on such scheme.
No, you have to submit written request in physical form and submit to mutual fund office or cams or karvy.As you mentioned above, your current sip is done by auto debit (offline) mode, then in such case you need to submit written request or sip cancellation form in physical mode.
Now how to cancel your Mutual Fund SIP
An investor can cancel an existing SIP registered through ECS or Auto debit mode with mutual fund by submitting SIP Cancellation request or written request.
If the SIP was started through an online platform, the cancellation can also be done through the same platform.
SIP Cancellation forms are available with AMCs or registrar and transfer agents.
You need to fill following details in sip cancellation form
1. Folio number
2. Scheme name and Plan
3. Sip amount and sip date
4. Bank account details
SIP Cancellation format:
Cancellation of Systematic Investment Plan
I/we had given an instruction for deduction of Rs.
-------------- into the following mutual fund scheme:
Scheme Details: --------------------------------------------
SIP Debit Date: ---------------------------------------------
Investor Bank Details
Account No. ----------------------------------------------------
Due to some reason, I/we wish to discontinue my SIP in above
I/we request you to cancel/stop deducting the sip amount
registered with you from my /our above account from the ensuring
Hereby, I request you to kindly stop further SIP installment
recovery of Rs.-------------
Kindly forward this instruction to my banker.
Friday, October 12, 2012
As we all know mutual funds houses started sending half yearly account statement for non transacted folio, to keep us updated for our investment in mutual funds. They also request us to update nomination details in that folio if not registered.
Few months back I had applied for mutual fund online access, after access, I got to know that my nomination details were not mentioned in many of my folio's, and till today I was under impression that I have nominee details updated in all my mutual fund investment.
I have good knowledge about mutual fund investment as I am working as Mutual fund Advisor from last 8 years and I know how to read/check mutual fund account statement, so question which surprised me as how this most important information got skipped in my mutual fund investment though I always have habit of checking all the details in my mutual fund account statement.
I guess the problem area is some mutual fund houses don't mention nominee details in mutual fund account statement, so in this situation, how to check nominee details in mutual fund investment???
First where to check details in Mutual Account Statement
If Nominee details are available in account statement, normally information is placed on right/left side of account statement.
Like Example, Mutual fund account statements of HDFC, SBI, PNB, Kotak and Birla Mutual fund
In some Mutual fund Nominee details are mentioned in bottom, like here in this example of Reliance Mutual fund Franklin Templeton Investments.
How to Check Nominee details
1. If nominee details are not available in mutual fund account statement, call mutual fund customer care helpline number, and verify your nomination details.
2. Some mutual fund websites have such option available in website, like in SBI mutual fund website, you can check whether nominee details are registered in your folio or not.
3. If you have online access to your mutual fund investment, you can check the nominee details by visiting online.
4. The nomination details information will not be available on CAS (Consolidated Account Statement), you need to verify the details individually considering your each and every folio(investment) in mutual fund.
Have You Chosen Your Nominee in Mutual Fund Investment!
Thursday, October 11, 2012
Dormant Mutual fund Account Statement is now replaced with Half Yearly Account Statement!
Very recently i have received email account statement with subject: Half Yearly Account Statement
"Thank you for investing in XXX Mutual Fund. This communication is sent in accordance with SEBI (MFs) Regulations in respect of non-transacted folios for the period 01-04-2012 to 30-09-2012. Please find the enclosed account statement of your folio for the above mentioned period in PDF format. To safeguard the information contained therein, the said file is encrypted and protected with your PAN / Folio Number. We also take this opportunity to request you to please get a nomination registered for your folio, if not already registered"
What is meant by Dormant Mutual fund Account Statement
It actually means update on Non transacted mutual fund folio.
According to para 14.3.4 of the Master Circular for Mutual Funds titled 'dormant account holders', "mutual funds shall also provide statement of accounts to those unitholders who have not transacted during the last six months prior to the generation of the statement of accounts."
This is a measure by SEBI to keep you updated about your mutual fund investments to those unit holders who have not transacted during the past 6 months prior to the date of generation of the Statement of Accounts’.
What is Purpose of sending this information
The reason for sending this information is to keep investors updated on a half-yearly basis.
Earlier Posting on Dormant Mutual fund Account Statement
Tuesday, October 9, 2012
In March 2012, L&T Finance had acquired the India assets of Fidelity Mutual Fund. In September 2012, SEBI has issued a no objection certificate (NOC) on the change of ownership of Fidelity AMC .
SEBI gives green signal to L&T-Fidelity deal, both fund houses will merge their schemes which have common objectives. L&T has eight equity schemes, two hybrid and seven debt funds while Fidelity runs 15 schemes. L&T MF has a predominant debt book while Fidelity has focused on equity assets. Both, L&T and Fidelity have a common registrar — CAMS.
Fidelity Mutual Fund has announced the merger of following Schemes.
The dissenting unit holders of L&T and Fidelity are given an option to redeem/switch out from the schemes within October 15, 2012 to November 15, 2012 without paying any exit load.
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