Skip to main content

Appointing Nominees Vs Joint Account Holding

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

From estate planning perspective, What is more important to have in accounts and investments – Joint holder or nominee? This question was asked by Mr Saksham through mail referring to my article on nomination. He specifically singled out point no. 2 at the end of my article where I wrote,

"If you want to further reduce the hassles of the family members, than rather appointing nominee make them joint account holder and keep the mode of operation as "Anyone or survivor" or " Former or survivor". Don't forget to mention the same in your WILL too."

He questioned that if he appoints a joint holder in all his investments than does this mean that there's no need to appoint a nominee. It was a small and direct question but requires a detailed answer so I thought of writing a post on this.

 

About joint account holder

 

1.) Joint holding makes funds accessible to all joint account holders (depending on mode of operation opted), which is not possible in single holding. This helps when primary holder is going through bad health or gets temporary disabled due to accident or in any such situation when primary account holder is not available to sign or operate the account.

2.) Joint holding can help in keeping check on the usage of funds and inculcate some discipline in the personal finance. For e.g. when your children becomes major, and from tax planning perspective you want to gift some amount to him or you want to transfer the funds saved for his/her education into his account, but you are not sure on the financial management ability of him. In such case you can make yourself a joint holder in that account and keep the mode of operation as Joint, so till the time you gain confidence in the financial management ability of your children you can operate the account jointly with them.

3.) Just like the above mentioned case, joint mode of operation between spouses as joint account holders in bank accounts as well as in investments maintains a check on keeping up with the family budget as well as unnecessary withdrawal/redemption of investment for impulsive buying.

4.) Joint holding in some cases helps you saving taxes too. Like in case of joint home loans, both the borrowers can claim tax benefit in the ratio of their ownership. Even if there is rental income on the property or capital gains earned by selling off the same than again both income gets divided among the all owners.

Some misconceptions regarding joint account holders

Joint holders become the co- owners and thus can claim part of the deposit or investment. This is not true. In every financial investment joint holder is added just from operational point of view. Complete ownership, earnings and tax liability would be of the primary holder only.(with only exception of real estate).

Do I have to close my existing account and open a new joint account – No, not required. You can make your existing bank account a joint account. But yes, this may not be possible in the investments that you have made.

Can I make my salary account joint – Yes, your salary account is a normal saving account and you can add joint account holder in it.

Disadvantage of joint account holders:

- The main disadvantage of having joint account holder is that couples may not feel comfortable with the loss of financial independence that comes with a joint bank account, especially early in the marriage.

- Other disadvantage or you can say restriction in joint account holding is that no single holder can make changes in the basic details or structure of account on his own. For change in address, phone numbers, closing of account etc. both account holder signatures are required.

What is advisable joint holder or nominee?

Now lets come to the main question, which one is advantageous to have – Joint account holder or nominee? Can one avoid appointing nominee if there's a joint account holder or if someone has nominee, is there any requirement of joint account holder? Well it is very much clear from the above mentioned detail that if the purpose is easy operation of account in the lifetime or even after death of primary holder, having a joint account holder is always advisable. But nomination also has its own importance. It's like having an alternate to the joint holder. Do keep in mind that neither joint holding nor nomination creates a legal ownership towards funds lying in bank account or joint investments. The legal ownership goes to the person mentioned in the WILL or to the legal heirs as per indian succession act. So the onus lies on you to write a proper WILL and keep joint account holder and nomination both as per your distribution goal. Idea behind all this is that the wealth should be managed and distributed comfortably and without any ambiguity or confusion. You can make the ultimate beneficiary or the one to whom you want to bequeath the particular investment as a joint account holder and alternate beneficiary as nominee who will get the inheritance in case something happens to joint holder or if joint holder predeceases you. Also please note that appointing nominee has been made compulsory in many investment products.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Perpetual SIP - Its Advantages

Retail investors have taken a fancy to investing in mutual funds through systematic investment plans (SIPs). As per industry estimates, Rs 4,000 crore flows into SIPs every month. One way to take advantage of SIPs in a true long-term manner is to opt for a perpetual SIP 1. What is a perpetual SIP? In an SIP , you make periodic investments in a mutual fund scheme of your choice generally every month for a pre defined tenure. While signing up an SIP mandate , you have the option to leave the end-date column blank. If the column is blank, it means the investor has opted for a perpetual SIP . Most fund houses assume this SIP will continue till December 2099 unless you give a written communication to stop it. However, some fund houses require you to tick the `perpetual option'. 2. What are the advantages of perpetual SIPs? Registering an SIP involves a lot of paperwork and it takes time. It is observed that many investors skip their SIP instalments when they go for short-tenure option...
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