Deadline for adding a nominee to your mutual fund and demat account is 31st December; check process

Come December 31, 2023, individual investors in mutual funds and holders of demat accounts are facing a crucial deadline set by the Securities and Exchange Board of India (SEBI). By this date, it's mandatory for account holders to nominate their assets or opt out of the nomination process.

Failure to nominate their holdings by the December 31 deadline could result in SEBI freezing withdrawals from these accounts. This means affected investors won't be able to access their funds in mutual funds or conduct trades through their demat accounts. However, investors who have already submitted nomination details need not resubmit them.

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The importance of nomination in mutual fund investing lies in ensuring a clear allocation of assets in the event of the holder's demise. Without a nominee, legal procedures may prolong and potentially inflate costs for the transfer of investments.

Adding a nominee to a demat account can be accomplished through the following steps:

1. Access the official NSDL portal.
2. Click on the 'Nominate Online' option on the homepage.
3. Provide necessary details like DP ID, client ID, PAN, and OTP on the subsequent page.
4. Choose between 'I wish to Nominate' or 'I do not wish to nominate.'
5. If nominating, enter the nominee's details as prompted.
6. Ensure the eSign Service Provider's page is verified and proceed.
7. Complete the process by verifying the OTP.
   
   For mutual fund folios, up to three nominees can be added, with the option to specify the percentage share for each nominee. Otherwise, assets will be equally distributed among the nominees.