It is good to plan your investments and park your money to fetch some returns and allow it some growth. When planning your investments, an investor must do the ground work and research properly. All questions regarding the size and term of investment, risk and returns associated, ratio of expense and performance, performance of fund house and its manager, along with diversification of funds should be answered. The type of scheme you plan to invest in should share common financial objectives as yours, so individual and collective aims are met. So, once you are sorted with your investment plans for taking a stake in mutual funds, next in line should be the procedure and documentation required. Often this is easily missed out when making your investment plans, though not a tall task but should surely be given a thought.
So, the list of documents that might make you a little more ready when you begin your mutual fund investments are as follows:
- Mutual Fund Account Form & SIP Form
If you are a first time investor or it is a Systematic Investment Plan (SIP) that you wish to invest in, firstly you'd be required to fill up two forms. One will help you open an account with the mutual fund and other to specify the details related to SIP for specifics related to the amount of monthly installments, frequency, etc. But if you are already invested with a mutual fund in that case you'd only be required to fill the SIP form.
Next in line of your list of documents will be the Know Your Customer (KYC) application form. It has been made mandatory to obtain KYC acknowledgement from anybody you wishes to invest in mutual funds. This shall be given along with the mutual fund form. By submitting the KYC acknowledgement you would no longer require to submit copies of your PAN card, which were required earlier.
- Cancelled Blank Cheque
When you initiate your SIP investments, and defer your minimal investment for that time, you must submit along a canceled blank cheque. A cancelled blank cheque in this case is required to meet the electronic clearing system (ECS) mandate. Via this cancelled cheque details mentioned about the investor's account number, the Indian financial System Code (IFSC) code, the magnetic ink character recognition (MICR) code, are all captured.
- Documented Proof of Relationship with Minor
In case you are planning to invest in mutual funds in the name of minor, a third-party declaration form becomes important to fill and submit. Only if you are a parent, you can invest on the behalf of the child and documents as proof to back the relationship should too be submitted. A birth certificate or a passport with the details of parent's name and relationship can suffice. In case the child the child has a guardian as Okayed by the court, documented proof of the same establishing the relationship with the minor and guardian is a must.
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