I am married and reside in Bengaluru. I want to invest in equity mutual funds with my mother under both our names so that either of us can manage this account. I have a couple of queries. Can I manage this account just like a joint bank account? Are there any problems with joint holding in mutual funds?
You can invest in mutual funds jointly with your mother, under both your names called joint holding in mutual funds. A joint holding can have a maximum of three account holders. You and your mother, both need to be KYC Complaint. While choosing the joint holding, you are given 2 options: “Joint Holding” or “Either or Survivor” You need to be very careful while selecting these options. If you select ‘Joint Holding’ you and your mother enjoy equal rights and authority. You and your mother’s signature are needed for purchase and redemption of mutual funds. If you relocate to another city, you might face a lot of difficulty to keep up with documentation and paper work. If you opt for “Either or Survivor” either you or your mother can carry out the buy/sell transactions. Opt for “Joint Holding’ only if you don’t want your investment partner to make unilateral decisions. In case of death of one of the holders, the AMC passes the ownership of the mutual fund units to the other/remaining holder.