Know about nomination in mutual fund schemes
The Nomination is a process to appoint a person.

The nomination makes the transfer of funds to the near and dear ones simpler, hassle-free with minimal documentation
Under Regulation 29A of SEBI Mutual Funds Regulations, 1996, Fourth Schedule, the nomination is a facility provided by the fund house to an individual unitholder (including the sole proprietor of sole proprietary concern) or all joint unitholders, if the Units are held jointly by more than one person.
What is nomination in mutual fund schemes?
The Nomination is a process to appoint a person, who can take care of assets and is entitled to the Units held by the unitholder or the redemption receipts thereof on the death of the unitholder or all the joint unitholders.
For opening new folios/accounts by individuals with the single mode of holding, nomination facility is mandatory. At present, fund-houses do not allow new folios/accounts for individuals in single holdings without nomination. In case of joint holdings with more than one holder, the nomination is not mandatory. Still, financial planners recommend that new folios should always have a nominee.
Why appointing a nominee for your mutual fund investment is vital?
The nomination makes the transfer of funds to the near and dear ones, that is, the nominee(s) of unitholder, simpler, hassle-free with minimal documentation in the event of the death of the investor. Thus the nomination facilitates the smooth transfer of funds to the nominee(s) on the death of the investor. In the absence of nominee, several documents like will of the deceased person, legal heir certificate as per succession law, no-objection certificate from other legal heirs, etc., will have to be produced by the heirs/claimant to get the units transferred to the account of legal heir(s), and that is a very lengthy and straining procedure.
What is the process of making a nomination?
At the time of investing in a mutual fund for purchasing units, the ‘Nomination’ section is provided in the account opening application form, where an investor can furnish the nominee details. Individual investors holding accounts either singly or jointly can make a nomination.
Who can be a nominee?
A nominee can be any person and even a minor. If the nominee is a minor, the guardians of the minor will exercise control over the mutual funds until the nominee becomes 18 years old or attain the age of majority as stipulated. Transaction/s made by the guardian during the period when the nominee is a minor has to be ratified by the minor after attaining the age of majority.
In a mutual fund, investor(s) can also have multiple nominees and specify the percentage to be given to individual nominees as per their preference. However, in the event of the death of any of the holders, the benefits will be transmitted to the surviving holders. The nominee will be entitled to the benefits only in the case of the death of all the unitholders.
A non-resident Indian (NRI) can also be a Nominee subject to the exchange control rules in force.
Nomination can also be done in favour of the Central Government, State Government, a local authority, a religious or charitable trust, or any person designated by his/her office.
Who cannot be a nominee?
A company/body corporate, Hindu Undivided Family (HUF), partnership firm, society, or a trust (except a religious or charitable trust) cannot be nominated.
How many nominees can an investor appoint?
In a mutual fund folio, an investor can register up to three nominees. However, the investor(s) need to specify the percentage of the amount in favour of each nominee in case of his death, and such allocation/share shall be in whole numbers without any decimals. In the event of the percentage not being specified, every nominee will be eligible for an equal share.
Who can nominate?
Only individuals (including the sole proprietor of a sole proprietary concern) can nominate.
Who cannot make a nomination?
A Power of Attorney Holder (PoA) and the guardians of minor investing in mutual fund units on behalf of a minor cannot nominate.
What if, as an investor, you do not wish to appoint a nominee?
In this case, the investor must sign and indicate the same by signing on the requisite space.
Can a nomination made be changed or cancelled?
The nomination once made by an investor can be changed/added/subtracted anytime subsequently and any number of times. A new nomination request will automatically cancel the existing nomination and replace the same by fresh nomination. Cancellation of nomination can only be made by unitholders who made the original nomination, singly or jointly. On cancellation of the nomination, there shall not be any obligation on the part of the Mutual Fund to transmit the units in favour of any of the nominees.
What if the nomination was not made in your existing investments?
If there was no nomination in your previous investments, you can add a nominee to the existing mutual fund folio easily by filling a form and submitting it to the fund house.
How can the nominee claim the units?
After the death of the unitholder(s), to claim the units, the nominee has to complete the necessary formalities including proof of death of the unitholder, completion of the KYC process with the signature duly attested, furnishing of proof of guardianship in case the nominee is a minor, and other necessary documents.
You invest to gain a financial advantage in your life as well as to secure the financial gain of your loved ones in your absence by a simple settlement procedure. Nomination facility fulfils this objective and takes care of your dearest ones, both financially and emotionally, at the critical moment of dealing with grief. So nominate whenever you invest without fail.
That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.
With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh / Enquire
Related Links:
- 10 Things to know before finding best mutual funds for SIP
- 11 Difference between stocks and mutual fund
- Are you prepared for your retirement?
- As an investor, what should you look into an offer document (OD)?
- Asset Allocation is Important
- Attaching goals while investing in mutual funds
- Balanced Mutual Funds in India
- Benefits of investing in mutual funds in India
- Conservative hybrid funds
- Difference between Exchange Traded Funds (ETF) and Index Funds
- Does Mutual fund provide risk diversification?
- Dynamic Asset Allocation Funds or Balanced Advantage
- Effects of Mutual Fund on Indian Economy
- Entry load and exit load in Mutual fund
- ESG funds (Environment, Social and Governance)
- Factors influencing the investments decisions of retail investors in Mutual funds
- Gilt free Gilt mutual Funds
- Gilt Fund with a 10-year constant duration
- How do you evaluate mutual funds’ performance?
- How mutual fund systematic transfer plans or STP work
- How side pocketing works in mutual funds?
- How single mothers can secure their children’s future
- How SWP from Equity Hybrid Funds can be useful to get regular return
- How to check your mutual fund KYC status online
- How to invest online in mutual funds in India
- How to start SIP in mutual fund?
- Hybrid Funds- to enjoy the best of both equity and debt funds
- In India how to invest in mutual funds
- Know about nomination in mutual fund schemes
- Know the advantages of starting your SIP early
- Let’s talk about Equity Linked Savings Scheme (ELSS) of Mutual Funds
- Let’s talk about Venture Capital Funds
- Low Duration Mutual Funds
- Medium Duration Mutual Funds
- MF is a retail product designed to target small investors, salaried people and others
- Mistakes to avoid while investing in mutual funds
- Mutual fund for children’s higher education
- Mutual Fund KYC How you can do
- Mutual fund past performance and consistency
- Mutual funds and Insurance plans
- Mutual funds for Beginners
- Penetration / Reach of Mutual Funds in Tier-3 Cities
- Regular mutual funds over Direct plans
- Selecting a mutual fund scheme
- Should I opt for SIP or bulk investment?
- Start online mutual fund SIP Investments
- Taking a loan against mutual fund investments
- The common myths about Mutual fund NAV
- The difference between Mutual Fund and ULIPs
- The different types of mutual funds in India
- The investor’s perception and preference towards Mutual funds
- The Mutual Funds in India
- The number of different schemes should one invest in?
- The role of a Fund Manager in the Mutual Fund scheme
- The working of Arbitrage Mutual Funds in India
- The working of Asset Management Companies in India
- Time is Precious
- Value Investing with Value Funds
- Various types of Equity Mutual Funds in India
- What are Banking and PSU Funds
- What are Corporate Bond Funds
- What are Credit Risk Funds
- What are diversified equity mutual funds?
- What Are Dynamic Bond Funds
- What are Growth Schemes?
- What are income mutual funds or income schemes in mutual find?
- What are index funds?
- What are Interval Mutual Fund Schemes?
- What are large cap mutual funds?
- What are Liquid Mutual Funds?
- What are mid and small cap mutual funds
- What are Money Market Mutual funds?
- What are Multi-Asset Allocation Funds
- What are mutual fund debt funds?
- What are Mutual Fund Fixed Maturity Plans
- What are Mutual Fund Monthly Income Plans
- What are mutual fund tax benefits
- What are Offshore Funds?
- What are Overnight Funds?
- What are sectoral mutual funds?
- What are the benefits of investing in mutual funds versus directly in shares
- What are Top Performing Mutual Funds in India
- What are ultra-short term debt mutual funds?
- What happens to money invested, If a mutual fund scheme is wound up?
- What if a fund changes its strategy?
- What is a Fund of Funds (FoF) scheme?
- What is Equity Saving mutual Funds
- What is Floater Fund?
- What is Gold ETF
- What is NAV of mutual fund
- What is SIP Top-up, and what are its benefits?
- What is tax saving mutual funds and how can it help create long term wealth
- What is the difference between an open-ended and close-ended scheme
- What should I do if fund’s poor results persist?
- When should you change your investment plan?
- Which is the best mutual fund according to your risk appetite
- Who and How are mutual funds regulated?
- Why should you consider Fund Costs?
- Why should you invest through Mutual Funds?
- Why should you monitor and review your fund
- Why SIP in Mutual Fund
- You Should Increase SIP Amount Now
- Alternative to Fixed Deposits