How To Claim Unclaimed Money Of Your Mutual Funds
Dec 21, 2017

Author: PersonalFN Content & Research Team

claim

Mr Mehta had invested in few mutual fund schemes in 2005. Being a banking professional and with constant re-location, he had not updated his KYC for these mutual fund schemes. Being the bread-winner of the family, he made all the financial decisions. Additionally, his family was not kept in the loop. A month after his demise, his wife was surprised to find these mutual fund scheme documents.

On enquiring with the Mutual Fund Houses, she learnt that there were some unclaimed dividends on these schemes. And now, she has no clue for how to go about claiming them.

When these investments were made, years ago, online facilities were non-existent.

Do you have some unclaimed dividends or redemptions stuck with the fund house as well?

Here’s the time to look at everything you need to know about claiming unclaimed money.

What is unclaimed money?

The fund house categorises money or assets unclaimed after a period of time when the unit-holder cannot be located.

As per SEBI guidelines, the Asset Management Company (AMC) may invest the unclaimed money into the call money, money market instrument, a liquid scheme or money market mutual fund scheme floated by the AMC to deploy the unclaimed amounts.

Now you would wonder, why someone wouldn’t claim for their money.

So, a lot of times investors do not update their mailing address with the AMC, when they re-locate. Hence, the cheque goes undelivered and is not received by the investor. Many times, investors would forget to en-cash the cheques they receive.

Another common reason is, there are times when your personal information is incorrect. Like for instance, the account number you provided was incorrect or its now an inactive account.

Hence, in case you have opted for Real Time Gross Settlement facility, the funds directed towards your savings account will be re-directed.

In such cases, the dividend (in case you opt for cheque pay out) or redemption amount declared on your mutual fund units lies with the AMC until it is claimed.

What happens to my unclaimed money in mutual fund?

Further, if you claim your unclaimed money within three years from the due date of dividend/ redemption, then you are eligible to receive this unclaimed amount along with the interest earned on it.

But, if you fail to claim this money after three years, then you will receive only the unclaimed money with the interest earned on it for initial three years. The interest earned on your money after the three years is directed towards the Investor Education and Protection Fund (IPEF). This in turn is used to spread awareness and inculcate financial education.

When can you claim for your money back? 

You can claim for your unclaimed money at anytime. However, it's best to claim as soon as you are aware about this money.

What is the procedure to claim for this unclaimed money?

To claim for this unclaimed money, you can directly contact the fund house. You can even contact your respective Registrar & Transfer Agent (R&TA). You need to provide them your folio number, bank account number, and correct/updated KYC documents.

(You may also like to read: 5 Easy Steps To Become KYC Compliant)

What process the nominee or legal heir must follow to claim for investors unclaimed money at the time of death ?

In case you are claiming the money as the nominee or the legal heir, the procedure is a bit longer. For instance, in Mr Mehta’s case above, his wife must first complete the ‘transmission’ process and transfer the MF units to her name. Then she can follow the same procedure as the MF scheme owner to claim the unclaimed money. We suggest contacting the fund house, R&T registrars or seek the assistance from a financial advisor if needed. With this, you can ensure correct documentation and avoid further delay.

(Read this important article on: Mutual Fund Nominee Registration - Everything You Need To Know)

How do I update details across various AMCs?

Thanks to technology, you do not have to visit AMCs or Registrar offices in person. Moreover, you can update your details via one form at Mutual Fund Utilities and your details will be updated across all the AMCs. MFU is a common transaction aggregator of MF industry.

What if I do not have correct or incomplete folio details?

In this case, the SEBI guidelines work the best for us. As per the guidelines, all the AMCs and Association of Mutual Funds in India (AMFI) have to declare the details of unclaimed money on their websites. You can visit the respective websites and access the details of your unclaimed money by providing proper credentials such as PAN, date of birth, and so on.

On the AMFI website, there is combined list of investors, with their folios, that have unclaimed money. It provides further information like name and address of the investor and name of mutual fund where the unclaimed amount is held.

If you have old investment receipt, you can visit the AMC website and click on unclaimed dividend and redemption section. Here you need to provide one of these details – PAN, Folio Number, and Account Number – along with – date of birth, name, mobile number or email address. If there is some money, you need to fill the application form for unclaimed dividend and redemption and send it to the AMC or R&T. The mutual company thereafter will process and send your money across to you via cheque or ECS.

Points to remember:

  • Always update your KYC across the financial institutions
  • Register and update your email address and mobile number
  • Avoid maintaining more than two or three savings accounts
  • File your documents and receipts of your investments
  • Write a Will and nominate your legal heir beforehand
  • Always nominate some family member or friend in each of your investments
  • Keep your family in the loop
(Also read: How To Link Aadhaar With Your Mutual Fund Investments)

 To Sum-up

Though with technology, most of the transactions and investments are digital, please remember to maintain the paper records of your old documents. Keep your nomination forms and Will in place. MFs send reminders of unclaimed amount at least twice a year to their investors via email or physical letters. Do not ignore and claim your dividends on time. Opt for an ECS facility rather than physical form so that your dividend proceeds are credited directly to your account and it is convenient for you to track your fund movements. Whenever there is change in any of your KYC details, intimate the mutual fund company as well.

To learn in detail about mutual funds and how they work, you can download our free guide here.



Add Comments

Comments
deepakvinekar@gmail.com
Aug 19, 2018

I had invested some amount in SBI Mutual Fund-Magnum Equity Linked Scheme 1995 (MELS-95)-Folio No: 0927249. The scheme matured fro redemption on 31st mar'2005. As per the letter received , the NAv payable at the time of redemption was Rs.24.48 per unit.I have not been able to redem it as of now. Kindly facilitate me in doing so.
rputhenveettil368@gmail.com
May 06, 2018

Best mutual fund guidelines, pl.send
 1  

Financial News. Simplified


Knowledge Center


Money Simplified Guides (FREE)


Mutual Fund Fact Sheets


Tools & Calculators