A single MF folio nomination can have multiple nominees
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How can I change a nominee?
Every mutual fund (MF) has a nomination change form. When you fill and submit it, the previous nomination information will be overwritten by the new one. This means that at any time, there can be only one nomination instruction for a folio. If the folio has multiple unit holders (joint holding), each should sign the change request. Nomination for all folios is essential to cover unforeseen eventualities. A single nomination can contain multiple nominees.
In the event of an unforeseen event, proceeds can be spread to up to three nominees as specified in the nomination request. The request should also contain the percentage shares of nominees. Minors can be nominees as well, but a guardian has to be specified.
I am 40 and planning for retirement. Can you suggest a good mix of funds?
If you are in your mid-40s and just beginning to build a retirement portfolio, ensure investments are sufficient. You can use an online calculator to estimate how much you need to invest to have a post-retirement lifestyle comparable to now. Once you know the investment amount, decide on the level of risk to take. My recommendation would be a 60:40 allocation between equity and debt funds.
For schemes, in equity go with a large-cap fund such as Birla Sun Life Front Line Equity and a diversified fund like Franklin India Prima Plus. If you can handle market volatility, you can add a mid-cap fund such as HDFC Mid Cap Opportunities, up to 20% of your portfolio. For debt, you can go for simple short-term debt funds like UTI Short-term fund. You can start with systematic investment plans (SIPs) but do not dig into this portfolio before retirement since you are already starting a bit late.
Are short-term debt funds safe? I want to use these instead of recurring deposits (RDs).
Short-term debt funds are good if you have a time frame of at least 1-2 years. Unlike fixed deposits (FDs), these funds do not give fixed, guaranteed returns. Also, there could be days when the net asset value (NAV) turns negative, if only a little.
But over a longer time frame, such risks of negative returns diminish significantly and short-term debt funds can be a far superior returning option.
These funds invest in a combination of certificates of deposit from banks, short-term commercial papers and top-rated short-term bonds and debentures. So, they can provide better returns than FDs. Consider starting with funds such as HDFC Short-term fund or ICICI Prudential Short-term fund as these have so far delivered better returns than bank deposits. Use the growth option instead of the dividend option for more tax efficiency. If you plan to invest for over 3 years, you can also get capital gains indexation benefit.
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