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Posted on  June 9, 2024 under  by Ayush Maurya

Updating Bank Account Details in Mutual Fund Folios: Why It's Important and How to Do It

One of the key steps to start investing in mutual funds (MFs) is to link a valid bank account to your MF account. This allows for easy transactions, such as buying or redeeming mutual funds, and for receiving dividend credits.

The market regulator SEBI allows investors to link up to five bank accounts to a single MF folio. If you change your bank account details, it is crucial to update them with the fund house to ensure that redemption proceeds and dividends are credited to your new account.

Why Bank Account Details Might Change:
There are various reasons why you might need to change your bank account details. When this happens, it's important to update your MF folio with the new information.

How to Update Bank Account Details:

  1. Single Account Change: If you're changing details for just one bank account, you can use the Change of Mandate form provided by the fund house. This form needs to be signed by all folio holders as per the mode of holding.
  2. Multiple Accounts Change: For changes involving multiple bank accounts, you need to fill out a Multiple Bank Accounts Registration form. Specify the primary account for transactions.
  3. Systematic Investment Plan (SIP): To change the bank mandate for an ongoing SIP, download and fill out the Change of Bank Mandate form for SIP from the fund house’s website. This form only updates the bank details for SIP and not for other transactions.

Additional Methods:
You can also update your bank details through Registrar and Transfer Agents (RTAs) like CAMS and KFintech, or platforms like MFCentral and MFUtility.

Cooling-Off Period:
Upon receiving a change of bank mandate request, a 10-day cooling-off period is implemented to prevent fraudulent or unauthorized transactions. Redemption proceeds will only be paid after this period.

Required Documentation:
For each bank account to be added, you must provide:

  • Bank account number
  • Type of account (savings or current)
  • Bank name
  • Branch
  • City and pin code
  • MICR and IFSC codes

Updating your bank account details ensures that all your transactions and dividend payments are processed smoothly and securely.

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Ayush Maurya

Written by Ayush Maurya

Ayush is a seasoned financial markets expert with over 3years of experience. He has a passion for breaking down complex financial concepts into simple, digestible terms. Through his 50+ articles, Ayush has helped countless individuals navigate the often intimidating world of finance.

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