Your Queries: Mutual Fund units can be transferred to nominee after death of unitholder

Published: February 25, 2020 2:30:42 AM

Karvy offers various services under one roof. While the stockbroking arm is under a cloud, its registrar & transfer Agent (RTA) unit is not under any scrutiny.

Though the monthly option is the most common, mutual funds do offer other payment options too.Though the monthly option is the most common, mutual funds do offer other payment options too.

By Jayant R. Pai

Can I transfer some of my mutual fund units to my daughter as gift for her wedding?
—Anuradha Sharma
No. Units can only be transferred in favour of a ‘nominee’, after the death of the unitholder. They cannot be offered as a gift. However, you can purchase fresh units in her name and finance the same. This will not violate Sebi’s Third Party Transaction (TPT) guidelines. However, mention her bank account as the one to be credited in the event of redemption. It may be prudent to draw up a gift deed in case of large amounts. Your lawyer / CA can advise you in this.

How can I invest in mutual fund through quarterly SIP?
—Deepak Kumar
Though the monthly option is the most common, mutual funds do offer other payment options too. These include daily, weekly, fortnightly, quarterly, half-yearly and annual. You may choose the quarterly option if the fund (and particular scheme) of your choice offers it.

I want to invest Rs 2 lakh in mutual fund, which can give around 10% annual return. What kind of fund should I invest?
—Sidharth Bhaskar
No mutual fund can guarantee returns. However, the category you choose and the holding period, could help you estimate the likely returns you may earn. Currently, it is highly unlikely that you will earn a pre-tax return of 10% per annum under any of the ‘debt fund’ categories (except, perhaps, due to increase in the NAV owing to a sharp rise in secondary market prices of funds in the ‘Long Duration’ or ‘Credit Risk’ category ). It is more likely, though not guaranteed, that you could earn this return in the growth options of large-cap / multi-cap equity funds when held for long periods (say, exceeding five years).

I invest in equity funds through SBI mutual fund. Would I have lost some money in the Karvy scam?
—Gaurav
Karvy offers various services under one roof. While the stockbroking arm is under a cloud, its registrar & transfer Agent (RTA) unit is not under any scrutiny. Hence, you need not worry about suffering any monetary loss on account of misappropriation of units held with SBI Mutual Fund.

The writer is Head, Products, PPFAS Mutual Fund. Send your queries to fepersonalfinance@expressindia.com

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