Mutual Fund FAQs

Basic

What is an entry load?

The costs of the fund management process that includes marketing and initial costs are charged when you enter the scheme. These charges are termed the entry load. It is the additional charge you pay when you join a scheme. It is now removed and no longer be charged to investors.

What is an exit load?

Funds impose a fee when you leave the scheme, i.e., redeem your units, called the exit load. Different schemes and categories of Mutual Fund have different terms for exit load, you can refer scheme documents before investments.

What is a Switch?

Some Mutual Funds provide investor with an option to shift his investment from one scheme to another within that fund this option is known as switching.

Investors can opt to switch units between Dividend Plan and Growth Plan at NAV based prices. Switching is also allowed into/from open-ended schemes currently within the Fund family or schemes that may be launched in the future at NAV based prices.

While switching between Debt and Equity Schemes, one has to take care of exit and entry loads. Switching from a Debt Scheme to Equity scheme involves an entry load while the vice versa does not involve an entry load.

Switches are subject to loads depending upon the Scheme details.

What is Systematic Withdrawal Plan (SWP)?

The unit holder may set up a Systematic Withdrawal Plan on a monthly, quarterly or semi-annual or annual basis to redeem a fixed number of units. They have to pay capital gain tax, which may be short term or long term. Any Unit holder can avail of this facility subject to the terms and conditions contained in the application form / Offer Document, it may also include exit loads if applicable.

How do I apply for Investments in a fund?

Investors can apply investment in Mutual Fund in Two Way;

  • Offline
  • Online

Apply Offline/ in Physical way:

  • Obtain an application form from your investment advisor / broker / agents. Else you can download it from our website or procure it from any of offices or investor service centres for different type of Transaction.
  • Read and understand the Offer Document and complete the application form.
  • Attach a cheque for the amount you would like to invest. You can also transfer the money electronically/online from your bank account and mention transaction ID in Application form.
  • Submit Filled & completed Application Form with Cheque in at any of CONCEPT Office or branch or AMC offices. You will receive acknowledgement in electronic or physical form.

Apply Online:

To know the procedure, click here.

Where do I get applications?

The applications can be obtained from your Advisor/ Online/AMC offices or branches. Alternatively, they can be downloaded from the Website of the funds houses.

What documents do I need to submit with my initial application to buy units of mutual funds?

The following is a list of documents required by an investor while investing in mutual fund for the first time. Subsequent investments do not need these documents.

Those who indicate "Individual" in the "Status" division of the application form

The application complete in all respects Those who indicate "Corporate" in the "Status" division of the application form

  • Certified copy of Memorandum of Association/ Articles of Association
  • Board Resolution authorizing the company to invest in mutual funds
  • List of authorized signatories with specimen signatures
  • KYC Documents of Directors/Authorized Signatories
  • Other Documents required as per KYC Norms

    Those who indicate "Trust" in the "Status" division of the application form

  • Trust Deed
  • List of authorized signatories with specimen signatures
  • Board Committee Resolution
  • KYC Documents of Trustees/Authorized Signatories
  • Other Documents required as per KYC Norms

    Those who indicate "Trust" in the "Status" division of the application form

  • Trust Deed
  • List of authorized signatories with specimen signatures
  • Board Committee Resolution
  • KYC Documents of Trustees/Authorized Signatories
  • Other Documents required as per KYC Norms

    Those who indicate "Societies" in the "Status" division of the application form

  • Board Committee Resolution
  • List of authorized signatories with specimen signatures
  • KYC Documents of Authorized Signatories
  • Other Documents required as per KYC Norms

    Those who indicate "Partnership Firms" in the "Status" division of the application form

  • Board Committee Resolution, Partnership Deed
  • List of authorized signatories with specimen signatures
  • KYC Documents of Partners
  • Other Documents required as per KYC Norms

Where do I submit my application form?

The Application can be mailed to or dropped off at any of offices of AMC or investor service centres, like CAMS/KARVY/Franklin/Sundaram.

Are there any minimum amount limits for subsequent purchases in the same scheme?

Yes, limits of minimum amount are applicable for additional purchases for schemes and will be mentioned in the Offer Document.

How can I transfer money between various schemes? Do loads prevail?

Yes, you can switch between schemes/investment options/plans. You need to complete a transaction slip, which you can download from website or detach from the bottom of your account statement.

A switch from one scheme to the other is treated as redemption from the scheme from where it is switched out & a purchase into the scheme into which it is being switched. Thus you will be liable for any 'applicable' entry load, exit load.

What is a lock-in period for my units?

Lock-in period is a time span during which the money invested cannot be redeemed. In the case of open-ended funds there are no lock in periods, however in the case of tax saving funds a minimum lock-in period of 3 years is applicable.

Please refer offer documents for Lock-In period for different schemes of Mutual Fund.

Is there a limit to transfer of money from one scheme to another?

Yes, the target scheme will have the minimum subscription amount as specified in the Offer Document.

Is there a limit to transfer of money from one scheme to another?

Yes, the target scheme will have the minimum subscription amount as specified in the Offer Document.

What is the applicable NAV for switch?

Switch requests are affected the day the request for switch is received. The Applicable NAV for the switch will be the NAV on the day that the request for switch is received

Can an investor appoint a nominee for his investment in units of a mutual fund?

Yes. The nomination can be made by individuals applying for / holding units on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of Power of Attorney cannot nominate. Nomination is highly recommended, specifically in SINGLE mode of holding.

How do Minors apply?

Parents / Lawful Guardians can apply on behalf of a Minor. They can sign the application on behalf of the Minor and status of the Investor in the Account Statement would also reflect the same.

Can an investment be made in joint names?

Yes, investments can be made in joint names.

How many joint names are permissible?

Apart from Sole/First Applicant, two more holders are permissible, so total 3 joint holders investors can opt.

What do you mean by "Joint" or either or survivor"? What option should I opt?

When an investment is made joint mode of holding it means the units are in both the names and transactions needs signature of both.

On the other hand when one opts for either or Survivor it means the units are in both the names but transaction can be carried out by either the individuals. And in case if one of them is dead, the transaction is not stopped. But in the case of joint holding the living individual have to submit the dead certificate along with the application to the AMC.

Usually, either or survivor is preferred option by investors.

Is there a time period to submit the application form?

Yes, there is cut-off time before which investor should submit the transaction so that he can take the advantage of that day's NAV.

The cut off time for purchase transactions for all mutual fund schemes other than liquid fund schemes is 3:00 p.m. This means that if you have invested till 3:00 p.m. on a particular day, you will get that day's NAV.

A mutual fund may accept applications even after the cut-off time, but you will get the NAV of the next business day. Further, the cut-off time rules apply for redemptions too.

Is Permanent Account Mandatory?

Yes, PAN is mandatory for Mutual Fund transactions.


SIP & Purchase

How do I apply for SIP?

  • Fill up a single SIP form only. (If you are applying first time in any AMC or want to create new folio, fill Common Application Form and a single application form.)
  • Attach Cheque same as SIP amount. (You can submit cancel cheque, in case you do not want First order). For Online SIP application, they can use Biller desk facility or mandate facility.
    Refer minimum SIP amount for respective schemes. There are many funds that have their minimum amount as low as can be as low as Rs 500/-
  • After successful application, SIP amount will auto Debit from your bank account on selected date.

Are there any minimum amount limits for subsequent purchase in same scheme?

Yes, there is a minimum amount limits for subsequent purchase in same scheme. You can refer Fund offer document for minimum purchase amount.


Account Statement:

What is statement of account?

A document issued by the mutual fund, which gives details of their transactions and holdings of an investor.

Can I get my account statement and other communication on email?

Yes, you can get email communication instead of the physical communication of the following:

Account Statement, Quarterly Newsletter, Annual Report, Communication on change of Address, Bank, etc. You need to provide your email id and subscribe for the above at the time of investing by ticking at the relevant column of the application form / common transaction form.

I have multiple accounts in a fund. Can I consolidate?

Yes, you can consolidate multiple accounts in a fund. The pre-requisite for consolidation is that all static details like Scheme details, Address, Bank, Mode of Holding, Unit holders, Nomination details etc. have to be identical across all accounts in a fund. Upon receipt of a valid request, consolidation into a single account would take place.

I have changed my residence. What should I do?

You have to inform your Financial Advisor office or concerned AMC in writing, appropriately signed and self attested address proof copy to modify KYC.

I have a new bank account. What should I do?

You have to inform your Financial Advisor office or concerned AMC in writing, appropriately signed and self attested cancel cheque leaf of new bank. Additionally, you need to submit self attested copy of old bank proof. In case, you do not have old bank proof, you need to submit bank letter stating account closure for your account number.


Dividend:

How do I get dividends?

Your dividend will be credit directly to your bank registered in the Mutual Fund Folio as and when declared by Fund house. If you are not receiving it in your bank, please contact your Financial Advisor or AMC or its branch to update bank records.

What are Dividend re-investment plans? Do loads prevail?

It is combination feature of both growth and dividend plan. Dividends are declared as in a dividend plan. But are not received instead are reinvested in the scheme No, there is no load on re-investment of dividends into the same fund. In a dividend reinvestment plan, the dividend is reinvested in the scheme itself. Hence instead of receiving dividend, the unit holders receive units. Thus units would be allotted under the dividend reinvestment. On receiving Dividend, you will incur Dividend Distribution Tax at 10% prescribed in Union Budget 2018-19.

I have not received my dividends what do I do?

You need to claim your dividend through Unclaimed Dividend Form with self Attested cancel cheque leaf in which you want Dividend onwards. For that you need to visit your Financial Advisor or visit nearest AMC office.


Redemption:

When and how can I redeem my investments?

In an open ended fund investments can be redeemed any time but in the close ended fund investments can be redeemed only after the expiry of the lock-in period, either by submitting a physical request to your Financial Advisor/ concerned AMC or requesting the same through the on-line services available under Investors section at the CAMS website.

Within how much time I will receive my redeemed money?

Redemption process is depending upon the scheme type. Kindly, contact your Financial Advisor or respected AMC for more information.

I have not received my redemption proceeds? What should I do?

You can write / email to your Financial Advisor or to the AMC concerned addressing the same for further course of action.


Taxation:

What is the Taxation in different Mutual Fund schems?

Equity and Debt are mainly two bifurcation considered in Mutual Funds. As per latest applicable Taxation 2019-20, you can find in below table.

What are the tax benefits for investing in mutual fund units?

Investors can get rebate from tax under section 80 (C) of Income Tax Act, 1961 by investing in Equity Linked Saving Schemes of mutual funds up to 1,50,000/-

Do I have to pay any tax on equity funds?

These are funds that invest in shares of companies (diversified equity funds and sector funds). They also include balanced funds, which have more than 65% of their total investments in equity. Dividend income from an equity-oriented fund is tax-free in hands of investors.

If I sell my equity funds units before I complete a year do I have to pay any tax?

If you sell the units within a year of buying, it will attract a short-term capital gains tax in equity and debt as per above table mentioned.

What if I sell my equity funds units after a year then, is there any tax that I have to pay?

If you sell the units after a year, 10% long-term capital gains tax on gain over Rs. 1,00,000 p.a. in equity oriented Mutual Funds. In Debt Mutual Fund, 20% after Indexation benefit.

What tax has to be paid when dividend is declared by funds?

Type of Scheme Dividend Distribution Tax (DDT) Rate
Equity oriented schemes 10% + 12% Surcharge + 4% Cess = 11.64%
Non-equity oriented schemes 25% + 12% Surcharge + 4% Cess = 29.12%

What if I sell my debt fund units before 3 year?

If you sell the units within 3 years, the short-term capital gain will be clubbed with the income of the individual investor, will be taxed as per income tax rules.