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NRIs should update KYC details of folios upon return

There is a simple KYC update form available

I have been living in the UK for the past 25 years and been investing in MFs for around 10 years now. I will be moving back to India in another three months. What is the procedure to change my residential status in my funds? Do I need to redeem all investments and re-invest?

—Anand Gupta

First, I can assure you that you do not need to redeem your investments and re-invest. You can update the folios to reflect your current status and keep holding them for as long as you want. There are two parts to your status—your residential status and your bank account type. When you move back, your residential status moves from non-resident to resident. Consequently, you would need to change your non-resident bank accounts to a resident account. Some banks allow you to do this change without changing the account number, but others give you a new account number for the new resident account. Regardless, before you update your folio, you would need to get a resident bank account, probably a simple savings account.

To make these updates reflect in your folios, you need to follow a two-step process. While these updates are in progress, please do not make any additional investments or redemptions from the folio. The first step is to update your know-your-customer (KYC) registration—there is a simple KYC update form available where you indicate your change of residential status as well as your new Indian address. You would need to file it with a copy of your Permenant Account Number (PAN) card and a proof of your Indian address. With that done, you would need to update the bank account attached to your folios. This can be done by sending requests to the fund houses that you have investments in. Some have a specific format for these requests, but most accept a simple written letter. You need to send it in with a cancelled cheque of both your old account as well as your new resident account. Once these changes go through, your folios become current and you can continue your transactions.

I am 19 years old and want to invest in mutual funds (MF). Please let me know what’s the procedure and how can I invest in it for my education.

—Nikhilesh

It’s good to start investing early. A good way to get started is to initiate a simple systematic investment plan (SIP) in a balanced fund such as HDFC Balanced Fund. You can invest as little as 500 per month in this fund. Learning about how the value of your investment moves and how it correlates with the movement of market indices such as BSE S&P Sensex and CNX Nifty, as well as the debt market interest rates, would give you invaluable education about how to go about investing for a secure long-term future.

Queries and views at mintmoney@livemint.com

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