A lot of investors are confused about whether or not they need ato . A is unnecessary and can prove to be absolutely wasteful when in .
#1. No physical certificates
The basic benefit of ais that the investor does not have to hold any physical fund certificates when the is made.
There is no need for a, in the case of because all records are electronic anyway. You don’t have any physical share certificates.
Thecompany will communicate a folio number to you which is like a number and send you electronic statements.
Since there are no physical certificates to store or safeguard, that important function of ais irrelevant for investors.
#2. No trading account required
When you usefor your , you must also open a with the broker to transact in those . This too is unnecessary.
In fact, havingrestricts your options and adds costs.
You canin and withdraw from simply by filling a paper form; online via the MF company’s website or online platforms like Scripbox.
#3. Additional charges
You have to pay an annual charge for youras well as some amount as transaction charge every time you or withdraw.
These charges are extra – over and abovecharges. There may also be a charge for the .
#4. Nominee restriction
With a, only a single nomination can be made, which can at times complicate the process of estate planning. If a person wants to distribute his or her assets to multiple people in different proportions, it gets difficult to do so with the funds lying in a .
Apart from nomination restriction, it is also not possible to hold anin joint names if the is in the name of a single person.
#5. Single view
Some people justify the cost ofaccounts with the single view of all that they get in the .
Arestricts your options and adds costs. It is unnecessary for .