Skip to main content

Security tightened for your Mutual Fund investment

MUTUAL fund houses are increasing the security features related to investing in their funds to prevent frauds. One of the measures has been non-acceptance of third party cheques from November 15, 2010.

This will have a significant impact in ensuring investors get the units for the amount that they invest, but the mutual funds are not stopping there. They are also asking investors to change the manner in which they write the cheques at the time of investment so that there is adequate safety present here too.


Fraud: Fraud is one of the worries that investors face while investing in a mutual fund scheme. There have been instances where investors have given the application form with a cheque, but have found that the units have been allotted to someone else even though the money has been withdrawn from their accounts.


This happens because the application form of the investor is switched at the time of making the investment, so while the cheque amount goes from the investors' account, the name, address as well as bank details are of some other investor's.

At present, investors write the name of the scheme when they invest in it. Apart from non-acceptance of third party cheques, funds are now also asking investors to add an additional detail when they write a cheque for investment. There are a few variations in the form of the additional detail that will have to be added, but it has to be noted that all the funds might not allow for all the routes mentioned here.


PAN: Normally an investor writes the name of the scheme on the cheque when they invest their money into a mutual fund.

This process was enough for the amount to be used for the allotment of the units, but now, fund houses are asking for an additional detail beyond the fund name to be written on the cheque.


One of them includes the Permanent Account Number (PAN), which is a unique number for each investor.

Thus, this becomes a distinguishing mark for the investment and hence will be able to ensure that the investment amount is not credited to the folio of some other investor. The PAN of the first investor has to be mentioned and this can also be checked with the details that are recorded with the fund. In this case the details will be written as `ABC scheme a/c ­ XXXXXXXXX'.


Investor's name: Another measure that the mutual fund houses are asking investors to adopt is mentioning the name of the first investor after the name of the scheme in the cheque. This is done to ensure that some other person does not use the cheque for the purpose of depositing it into their account and thus perpetuate a fraud. The mutual fund on its part will credit the units only into the folio of the investor whose name is mentioned on the cheque after the scheme name.

This can be done by mentioning the following details -`ABC scheme a/c -Full name of the investor'.


Folio number: For existing investors the situation can be made easy with the use of the details of the folio number after the name of the scheme in the cheque. This is a number that is allotted to each investor by the mutual fund house when they make an investment with them so that the details can be easily accessed when required.

Existing investors who want to make additional investments with the fund can adopt this route too if the fund allows it and this will be another safety feature.


Again, the mention of the number ensures that the money is not appropriated by someone else even if the cheque falls into their hands and this is precisely what the mutual fund houses want.


This will be written as `ABC scheme a/c ­ Folio No'.

 

Popular posts from this blog

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Save Tax With Mutual Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

Mirae Asset Ultra Short Term Bond Fund and Mirae Asset Tax Saver Fund

Mirae Asset Mutual Fund   has renamed   Mirae Asset Ultra Short Term Bond Fund , an open ended debt scheme, to   Mirae Asset Tax Saver Fund   with effect from October 18, 2016. Also, Mr. Sumit Agrawal, the co-fund manager of Mirae Asset India Opportunities Fund (MAIOF) and Mirae Asset Great Consumer Fund (MAGCF) ceases to be the fund manager with effect from October 1, 2016. Consequently, MAIOF shall now be solely managed by Mr . Neelesh Surana while MAGCF shall continue to be co-managed by Mr. Neelesh Surana and Ms. Bharti Sawant. ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. ID...

Good Loan

Why Is It A Good Loan?: Loans against gold are cheaper and better than personal loans as the former are available at lower interest rates. In contrast, the interest rates on personal loans are not standardised and can vary from bank to bank. Also, a personal loan depends on a host of factors including, the borrower's salary, profession and the purpose for which the loan is being taken.      For instance, the interest rate on a personal loan of 5 lakh falls in a wide range of 15-30%. But loans against gold are available for as low as 11%. Secured borrowing such as a loan against gold, investments or property is cheaper because it is backed by some assets, which command a good value at any point of time. If the borrower defaults on the loan, the banks can liquidate the assets to settle the loan account.    Being a secured loan, the risk of default and credit losses is significantly lower in this loan compared to other forms of loan for personal use. Given the lower risk, gold loa...

Diversification is key to gain more

Even those who prefer debt for its safety are looking at more options    It is not often that you find more than a couple of asset classes producing good returns at the same time. Invariably, assets such as gold and equity don't perform in tandem, and hence it was easier to allocate to them in line with the risk profile of the investors. In the last couple of quarters, however, more than one asset has turned attractive - gold, debt and equity. In line with the trend, you even have monthly income plans with a combination of more than two assets.    In the past, those who stuck to debt were a different class of investors who didn't wish to take risk with their money. The changing lifecycles and the growing integration of investment markets across the globe have pushed even individual investors to embrace the concept of asset allocation. Hence, you have individuals who were using debt to park profits being prepared to take advantage of other assets.    For instance, when the...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now