A Joint Holder In A Mutual Fund
Joint Accounts Good Or Bad?
From bank accounts to HUF accounts to property transfer, there is a whole lot to be gained from joint ownership.
While it is a convenient way to do so in a mutual fund, it does come with certain limitations.
A joint holding should be between two individuals or a maximum of three account holders.
To invest under joint names, all investors should be KYC-compliant.
Mode Of Ownership
Establish joint holding while filling the application, by selecting the mode of joint or either or survivor.
Mode of holding has to be specified while filling the application, or else the mutual fund house treats the default as joint.
In an either or survivor mode, any of the joint account unit holders can perform financial transactions.
In a simple joint account mode, modification and account changes can become tiresome due to compulsory submission of details of both account holders.
Joint holding is beneficial for you when you do not want the other holder to take unilateral decisions on the investment.
Similarly, it helps with easy transfer of mutual funds.
The main holder will gain tax benefits on ELSS or tax saving schemes in the either or survival mode of joint ownership.
Similarly, long or short term capital gains tax will also come into play for the first joint account holder.
Nomination comes into effect on joint accounts only after the death of both holders. Minors cannot be a part of joint MFs.
If you feel you need to secure some investments exclusively for an immediate family member, do a joint holding to ease succession.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.