Skip to main content

Nomination in Investment

 

Nomination in investment

 

As an investor, you spend most of your precious time in deciding on your investments, their tenure, and the returns that your invested money will fetch practically. Do you know who gets your investment money when you are "no more"?

I am sure most of you must have come across the 'nominations' column, while filling any of your financial application form, be it that for a Mutual Fund, or a Demat Account, or simply a Bank Account. More often, people have a tendency to leave the nomination field blank, or fill the same uncertainly, without even understanding the big importance of this little detail.
Here, let us try to put forth the significance of a nomination into our financial lives.

What is nomination?
A person to whom one can transfer the custodianship of his/her assets, in case of the event of the asset-holder's death, is termed as a 'Nominee'. Quite certainly, a nomination does not necessarily mean that you transfer your investments ownership as the full and final settlement to your nominee.

Additionally, the distribution of the same will occur in accordance with the WILL. A nominee could be a legal beneficiary, or he/she could also be any other person, who takes the permissible custody of the investor's assets, in case of the latter's death.

Why nomination is important?
It is necessary for any responsible person to have a nomination in place, in all of his financial investments. In the recent times, in accordance with revised regulations, it has become mandatory to put one's nomination before commencing any investment. Amidst the compulsion, one must ensure that the investor nominates the desired person.
Let us now describe the process and the facts related to your nomination registration in some of the following financial assets.

1. Life Insurance:
In this asset scheme, the final claim proceedings will, although settle in the nominee's favor, but he will be liable to fund distribution only according to the 'WILL'. If the Will is not prepared, all the heirs will get an equal distribution of the share.

2. Mutual Funds:
The process of Mutual Fund nomination is as simple as filling out your form details, while making an application for investment. One can also change the nomination, by filling the specified form that is available at all Mutual Fund offices. One can also nominate a minor, along with the guardian's name.

The nomination and the fund transfers take place according to the units mentioned in the MF folio brochure. In all future units too, the same nomination will be applicable under the MF document.

3. Demat Account:
The nomination in a demat account will not be like that of Life insurance or Mutual funds. The nominee here will be the legal beneficiary of the shares. Therefore, one must take care, while selecting a nominee for this account.

According to the Companies Act, this account's nominee has the power to supersede the Will, thereby transferring the share holdings to nominee's Demat.

4. Change of Nomination:
One may change his nominee's name, anytime during the term of investment. There is no restriction on the number of times, the nomination can be changed.

It is better for you to review the nomination periodically. Initially you could have kept your mother as the nominee. After your marriage you may change it to your wife. Later when your children become major, you may change the nominee as your son or daughter.

5. Minor as a Nominee:
Even you can nominate a minor. In case the nominee is a minor, an appointee looks after the asset until the minor turns into a major. So in addition to selecting the nominee you need to select the appointee for the minor nominee

6. Multiple Nominees:
Life Insurance also has the option of having more than one (multiple) nominations, which divides the investor's assured sum among all his nominees.

7. Claim Process:
The transfer of the investor's assets does not take place directly, without completing a stipulated claim process. The nominee must first inform the respective financial institutions, regarding the investor's death, and thereafter seek knowledge of the assets claiming process. The nominee should also submit the mandatory documents to validate his asset transfer, as stated under the law.

Although due to the law imposed by various regulatory bodies, the transmission processes of every financial institution is different, but let us get to know about some of the primary documents that all of them require. These include the Identity Proof of nominee, KYC Compliance (in case of MF and Demat Accounts), the Probate of Will, Succession certificate, the Claim Form, and Death certificate of the unit holder.

Concluding the discussion over Nominations, we will just say that this small step is just a way to ensure the security of our loved ones in a large way, which could otherwise become challenging for your nominees. Therefore, along with this, one should also prepare a registered WILL as part of his succession planning. Doing this will further reduce the pressure of assets' transfer.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

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 Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. 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
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Am you Required to E-file Tax Return?

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   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
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