You may have many goals and dreams in life. You invest your hard-earned money to fulfil those dreams and aspirations. You may also invest to help your loved ones achieve their dreams—both during your life and in your absence.Everyone has certain goals in life, some dreams to achieve. Every goal also needs some planning and not to forget, finance. One invests their hard-earned money to fulfil those dreams and aspirations, their own as well as their near and dear ones.Life can be full of surprises. One would expect that after his/her demise, logically, you’re their investments would pass on automatically to their partner, or children. But in real life, it may not be an easy or seamless process. Let’s take the example of Rajiv Gupta to understand why.Rajiv Gupta had created four different portfolios, one for his goals, one for his wife’s financial security, and the remaining to fund his children’s education. His <a href="https://www.mutualfundssahihai.com/en/what-systematic-investment-plan-sip">Mutual Fund SIPs </a>were also planned accordingly.Luckily, Rajiv Gupta was wise enough to assign a nominee to each of his portfolios. With one simple step, i.e. nomination, Rajiv ensured that the portfolios will be transferred to the rightful nominee and his purpose is fulfilled in case of any eventuality.Mutual Funds NominationsNomination is a simpler and inexpensive way to make things easy for one’s near and dear ones to claim the money in their mutual fund folio, demat account or bank account expeditiously, through minimal paper after their death.A nomination in respect of the Units does not create an interest in the property after the death of the Unit holder. The rights in the Units will vest in the nominee(s) only upon the death of all Unit Holders. It may be noted that a nominee may not necessarily acquire any title or beneficial interest in the property by virtue of this nomination. The nominee(s) shall receive the Units only as an agent and trustee for the legal heirs or legatees as the case may be.Is Nomination mandatory for Mutual Funds?Nomination is mandatory for MF investors. With effect from October 1, 2022, new investors subscribing to Mutual Fund units would have to compulsorily assign a nominee or fill a declaration form to opt out of nomination. Existing investors too would have to either assign a nominee in their older investments or opt out of nomination by March 31, 2023. This is applicable irrespective of whether the investment is held individually or jointly.&nbsp;How to add nominees to Mutual Funds investments?You can add or update the nominees in your Mutual Fund holding by submitting a physical request at the nearest AMC/RTA branch. Alternatively, it can also be done online on the AMC/RTA website or on mfcentral.com. Login to your account and choose the folio under which you want to add/update nominees. Fill in the nominee details like name and address along with the percentage of ownership each nominee will get. If no percentage is specified, each nominee will be eligible for an equal percentage. You will then receive an OTP as part of the two-factor authentication to verify the nominee updation request. Alternatively, the digital form can be signed using the e-Sign facility.If you are not comfortable online, you can visit the nearest branch or Investor Service Center, of the Fund House to add/update nominee details in your folio. All you need to do is submit a written application or fill up the relevant section of the Common Application Form. You will need to specify the account/folio where you need to add/update nominees and the names of the nominees. In case of more than one nominee in an account/folio, you need to specify the percentage allocation of your investments between all the nominees. Also, in case of joint holding, all the unit holders will have to sign the form with their wet signatures.Last wordsRemember, if an investor doesn’t specify a nominee in his/her account or choose to opt out of nomination, the investments can only be claimed by the legal heir(s) of the investor after proving their legal heirship. This, however, can be a long-run process. Hence, it is advisable to have nominee/s in all your <a href="https://www.mutualfundssahihai.com/en">mutual fund investments</a> to enable a smooth transfer of assets in case of an unfortunate event.So get all your Mutual Fund investment accounts updated with Nominee details and save your family from the hassle of proving their legal heirship to claim your investments in case of an unfortunate event.

Why is nomination important in Mutual Funds and what is the process for it?

Are Mutual Funds ideal for short term or long term Investment?“<a href="https://www.mutualfundssahihai.com/en">Mutual Funds</a> could be a good saving tool for short term.”“You must be patient with your Mutual Fund investments. It takes time to deliver results.”People regularly come across both the above statements, which are clearly contradictory.So what period are Mutual Funds suitable for? Short term or long term?Well, that depends on what one’s investment goals are, and most goals are driven by time. There are schemes suitable for short periods, there are several schemes suitable for longer horizon, and then, there are schemes for any period in-between.Consult your <a href="https://www.mutualfundssahihai.com/en/what-difference-between-mutual-fund-distributor-and-investment-advisor">Mutual Fund distributor or your investment advisor</a>, discuss your <a href="https://www.mutualfundssahihai.com/en/how-do-i-fulfill-my-financial-goals">financial goals</a>, and then decide where you want to invest. For example; 1. <a href="https://www.mutualfundssahihai.com/en/what-are-equity-funds">Equity-oriented Mutual Funds</a>- Look for longer periods, typically 5 years and above. 2. <a href="https://www.mutualfundssahihai.com/en/are-debt-funds-fixed-deposits">Fixed Income oriented Mutual Funds</a>- &nbsp;&nbsp; &nbsp;1. <a href="https://www.mutualfundssahihai.com/en/What-are-liquid-funds">Liquid Funds</a> - For very short term – Less than 1 year &nbsp;&nbsp; &nbsp;2. Short Term Bond Funds – For the medium term – 1 to 3 years. &nbsp;&nbsp; &nbsp;3. Long Term Bond Funds - For the long term – 3 years or moreAs you explore our website, you will know more about the <a href="https://www.mutualfundssahihai.com/en/what-are-various-types-mutual-funds">various kinds of Mutual Funds</a> too. Your mutual fund distributor/investment advisor can also help you identify the right type of MF to invest in as per your goals!

Long Term and Short Term Investment Plans for Your choice

There are a few type of mutual funds that impose a ‘lock-in period’ on your investment. These include equity-linked savings schemes (ELSS), Fixed Maturity Plans (FMP) in debt funds and closed ended mutual funds. A lock-in period refers to the minimum duration for which investors must hold their investment. Investors cannot redeem or sell mutual fund units in that period. &nbsp;&nbsp;Lock-in periods can vary depending on the type of mutual fund scheme. For instance, Equity Linked Savings Schemes (ELSS) are a tax-saver mutual fund with a lock-in period of three years. That means you cannot sell or redeem their units before the completion of three years from the date of investment. Similarly, certain closed-ended mutual funds may have a lock-in period specified in the scheme’s offer document. Besides, returns generated from investments owned for over three years are categorized&nbsp;as Long-Term&nbsp;Capital Gains (LTCG). The tax rate for LTCG is less than the rate applied to regular income (dependent on the individual's taxable earnings). Hence, lock-in period for more than three years may prove to be beneficial.However, most open-ended mutual funds do not have a lock-in period. You can buy and sell their units at any time.For fixed maturity plans in debt funds, you need to hold onto your investment until the lock-in period, which is for a fixed term. After that period, you can redeem your units. The lock-in is not for tax planning but to realize&nbsp;the yield on the underlying debt assets, which should be held until maturity.&nbsp;Lock-in periods are usually implemented to discourage short-term trading and speculation. It helps you develop the habit of investing for the long term.&nbsp;Importance of Lock-In Period1.&nbsp;&nbsp; &nbsp;Encourages you to stay invested for long-term 2.&nbsp;&nbsp; &nbsp;Prevents impulsive exits during market fall 3.&nbsp;&nbsp; &nbsp;Allows fund managers to focus on performance 4.&nbsp; &nbsp; Minimizes&nbsp;volatility in returnsDepending on the type of fund after the lock-in period, instead of selling your investment immediately, evaluate it. If it’s meeting your expectations, you can choose to hold on to it or even invest further.By aligning mutual fund schemes with your long-term financial goals and adopting a disciplined approach, you can leverage the power of compounding to achieve them.Disclaimer Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

What is Lock-in Period in Mutual Funds?

Risks could be controlled. And Mutual Funds can be rewarding!When we say “RISK” in investments, a few questions immediately arise in the mind of the investor… “Is my money safe?” &nbsp;”How much return will I get?” “Will I get my money back when I want it?”… While, all these are very valid questions, let’s look at them from three angles to understand Mutual Funds betterProfessional Fund Management - Mutual funds are managed by <a href="https://www.mutualfundssahihai.com/en/are-fund-managers-necessary">professional fund managers</a> and as an investor, you benefit from their research and expertise. While this may not completely eliminate risk, it certainly lowers it.Diversification – <a href="https://www.mutualfundssahihai.com/en">Mutual Funds </a>invest in a basket of securities. Diversification helps in minimizing the risk from a specific security’s under-performance.Select a Scheme In Line With Your Investment Objective - If the time horizon of the investment is in sync with the fund selected, you protect yourself from very short term fluctuations. For example, if you have invested in an <a href="https://www.mutualfundssahihai.com/en/what-are-equity-funds">Equity Fund</a>, you may be affected by short term fluctuations, but over a longer term, you would be more likely to get the long term returns associated with equities.Most people believe that <a href="https://www.mutualfundssahihai.com/en/what-risk-investing-mutual-funds">Mutual Funds are risky</a> possibly because of the standard disclaimer they&nbsp;come across in the Mutual Fund&nbsp;advertisements. It’s important to remember that the stringent regulations that ensure investor protection, professional fund management and diversification mitigate it to a large extent.

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