Change bank account in mutual fund

Changing the bank account linked to your mutual fund investments can be essential when switching banks, closing an account, or managing finances more effectively. Ensuring your mutual fund dividends, redemption amounts, and SIP payments are processed seamlessly requires updating your bank details. The process is straightforward but requires attention to detail, as missing out on key steps could lead to failed transactions or delays in payments. In this article, we’ll explore why changing your bank account might be necessary, the eligibility criteria involved, and provide a step-by-step guide to help you smoothly update your bank details for mutual fund transactions.

Why change your bank account?

• Switching banks: When you switch to a new bank, updating the mutual fund’s linked account is necessary to ensure continuous transactions.

• Bank account closure: If your current account is being closed, changing the linked account prevents future disruptions in SIP payments or dividend credits.

• Multiple bank accounts: Some investors prefer changing the linked bank account to manage their finances from a more convenient or higher interest-bearing account.

• Updated account benefits: New accounts may offer better banking services, online facilities, or rewards, encouraging investors to link their mutual fund with a more advantageous bank account.

• Enhanced security: If your bank account is compromised, you may need to switch it for better security measures to protect your investments.

• Simplifying transactions: Investors with multiple investments might consolidate payments through one primary bank account for easier tracking and management.

• Change in joint holder account: In joint bank accounts, any change in account ownership might necessitate an update to the mutual fund records to maintain smooth transactions.

Eligibility criteria for changing linked bank account

• Valid bank account: The new account must be active and operational with all required banking services.

• KYC compliance: Your new bank account must be KYC-compliant. If not, you’ll need to complete the KYC process before linking it to your mutual fund.

• Ownership proof: You must provide valid proof of ownership, such as a cancelled cheque or bank statement, for the new bank account. The account should be in the investor's name or jointly held with an authorised individual.

• Existing mutual fund account: You must already have a mutual fund account with your fund house to be eligible for updating the bank details.

• Consistent signatures: Ensure that the signature on your request form matches the one on record with both the mutual fund and the new bank account to avoid discrepancies.

• Joint account: In the case of joint holders, all account holders must provide their consent to update the bank account details.

• No active disputes: Your mutual fund account must not have any pending disputes or legal claims that could affect the account-changing process.

Step-by-step guide to change your bank account

• Review your bank details: Start by checking the current bank details linked to your mutual fund account and ensure the new account is active and meets the necessary criteria.

• Obtain the required form: Request the bank account change form from your mutual fund provider. You can usually find this form online through their website or by visiting their branch.

• Fill in the form: Complete the form with accurate details, including your investor ID, old and new bank account numbers, and any relevant personal details. Ensure there are no errors to avoid rejection.

• Attach supporting documents: Include a cancelled cheque or a recent bank statement from the new account, proving ownership. If the account is joint, signatures of all holders may be required.

• Submit the request: Submit the filled-out form and documents either online through your mutual fund's portal or in person at the nearest branch. Ensure you receive an acknowledgment of the submission.

• Verify your request: Some mutual fund houses may require additional verification, such as an OTP or written confirmation. Complete these steps promptly to avoid delays.

• Check the status: Once submitted, track your request’s status either online or by contacting customer support. The process generally takes 5-7 working days to be completed.

• Update your SIP mandate: If you have a SIP, make sure to update the ECS mandate for the new bank account to ensure uninterrupted investments.

• Confirm the change: After processing, confirm that the new bank details are correctly updated and transactions, including SIP debits or redemption credits, are reflecting in the new account.

Things to keep in mind

• Processing time: It usually takes 5-7 working days for the bank account change to reflect in your mutual fund records. Ensure the current account remains active during this period to avoid payment issues.

• SIP transactions: Don’t forget to update your ECS mandate or NACH form for ongoing SIPs to ensure the automatic debits are from the new bank account.

• Cancelled cheque requirement: A cancelled cheque from your new account is often mandatory. Ensure the cheque shows your name for faster processing.

• Communication from fund house: You may receive a confirmation email or SMS once the bank account change is processed. Keep a lookout for such communications to ensure everything is in order.

• Impact on redemption: If you plan to redeem mutual fund units, confirm that your new bank details have been updated to avoid any delay in receiving payments.

• Joint account holders: Ensure all joint holders of the bank account provide their signatures and consent for the update to avoid any procedural issues.

• Documentation accuracy: Double-check the documentation and information provided in the form to ensure accuracy and prevent any delays in the process.

Common issues and solutions

• Incorrect bank account detailsIf you mistakenly enter incorrect bank details when submitting the account change form, your request may be rejected. Solution: Double-check all information before submission to avoid delays or errors. Always verify the IFSC code and account number.

• KYC mismatchA common issue arises when the new bank account is not KYC-compliant or there’s a mismatch in your KYC details. Solution: Update your KYC information before proceeding. You can easily complete e KYC in mutual fund online.

• Delayed processingProcessing times for bank account changes can sometimes extend beyond the expected 5-7 days, leading to delayed transactions. Solution: Submit all required documents correctly and follow up with customer care if there is a delay beyond the normal processing period.

• Unresolved SIP transactionsIf the ECS or NACH mandate isn’t updated along with your bank account change, your SIPs might fail. Solution: Update your ECS mandate as soon as the bank account change is confirmed to prevent SIP disruptions. Always check with your fund house regarding SIP mandates.

• Joint account signaturesIf your mutual fund is linked to a joint account, failing to provide signatures from all account holders may lead to rejection. Solution: Ensure all joint holders sign the bank account change form and provide necessary documents for verification.

• Old bank account closureClosing your old bank account before the change is processed could result in missed payments or transaction failures. Solution: Keep the old account active until the new account is successfully linked and confirmed by your mutual fund.

• Multiple accounts linkedIf you have multiple bank accounts linked and need to change only one, confusion may arise during the update process. Solution: Clearly specify which account should be updated when submitting the form.

• Lack of communication from fund houseSometimes, there may be a lack of communication regarding the status of your request. Solution: Monitor the progress through the mutual fund’s customer service or your online account. You can access your account using bajaj finance mutual fund login.

• Difficulty in tracking portfolioAfter the change, some investors may face issues in tracking their updated mutual fund portfolio. Solution: You can easily monitor your investments and confirm the bank change by learning how to check mutual fund portfolio through online platforms.

By staying proactive and addressing these common issues, you can ensure a smoother process when changing your bank account linked to mutual funds.

Conclusion

Changing your bank account in mutual funds is a simple yet crucial process for managing your investments efficiently. By following the necessary steps, double-checking details, and keeping potential issues in mind, you can ensure seamless transitions without disrupting SIPs or redemptions. Staying informed about the process helps avoid delays and errors. Additionally, regularly monitoring your portfolio ensures everything is aligned correctly after the update. For a smooth experience, make use of online tools, stay proactive with communication, and always ensure your KYC is up to date for uninterrupted financial transactions.