This is the most basic requirement. If you wish to start a systematic investment plan (SIP), you need to fill in two forms. One to open an account with the mutual fund and the other to specify your SIP details such as frequency, monthly instalment amount, and so on.
If you are investing afresh in a mutual fund (MF) scheme, both the above mentioned forms are necessary. For instance, if you are invested in Franklin India Bluechip Fund (FIBF) and now wish to start an SIP in Franklin India Prima Plus (FIPP), you will need both the forms; one form to open your account in FIPP and another one to start an SIP. If, however, you wish to start an SIP in only FIBF, you only need to fill in the SIP form since you are already invested in it.
KYC And PAN Card
Effective 1 January, know-your-client (KYC) norms have been made mandatory for everyone who wishes to invest in an MF. All you need to do is to submit your KYC acknowledgement along with your MF investment form. You no longer need to submit copies of your Permanent Account Number (PAN) card since your KYC-compliance proves that you already have PAN. Before KYC was made mandatory for all, you needed to submit your PAN card copy if your investment amount was Rs 50,000 (KYC’s minimal threshold limit at that time) or below.
Visit www.cvlindia.com and click on ‘Inquiry on KYC’. A small window will pop up on your screen that will ask for your PAN card number. Fill it up and submit. If your KYC is approved, you will get a notification on the screen saying so. You need to take a printout of it as proof.
Typically, a blank cancelled cheque is not mandatory when you start your SIP these days. But if you wish to start an SIP straightaway without investing the minimal amount, it’s best that you give a cancelled blank cheque to facilitate an electronic clearing system (ECS) mandate. This is to ensure that your cheque details like the magnetic ink character recognition (MICR) code, Indian Financial System Code (IFSC), apart from your account number and others are appropriately captured. This is required for opening an SIP. However, if you are investing an amount by giving a cheque and wish to start an SIP starting from the next month, your first investment cheque is enough, even if you give both the forms together.
If you wish to invest in the name of a minor, you need to fill in a third-party declaration form. Only parents are allowed to invest on behalf of their children. Documents that establish the parent’s relationship with the child should be submitted; for example, a passport. If the child has no parents in case of an eventuality, then a court-appointed guardian can invest if necessary documentary proof is submitted to establish the relationship between the minor child and the guardian.