We looked at tax savings, gold deposits, small savings and spreading investments in the previous articles. Some of you might have invested in those schemes. My best wishes to you for growth of investments!! Some may like to invest afresh. Public who invested already may know that we have to make some efforts to create investments.
Financial investments are not easy like purchasing groceries from a supermarket. Even if the price of lentils sky rocket, they will sell it to you if you give the higher price. At present they don’t demand PAN number for purchase of lentils. In the ongoing trends PAN is likely to be demanded. But for financial investments PAN number and many other details are highly mandatory. PAN number details are mostly familiar to many. For others, PAN is Permanent Account Number. Income tax department issues it. One person should have one PAN number only.
Alright, PAN number has been obtained. Don’t think that one can make financial investments in financial institution. The reasons are black money, Hawala which is covert transaction in foreign exchange, financing terrorist acts. The central government has made many legal procedures to stop those irregular financial transactions.
The most important procedure is KYC- Know Your Customer. This must be followed by each and every investor. This should be done before making investments. It has to be done only once. For this one needs PAN number, colour photograph and correct address proof. I repeat, one needs a correct address proof (Many face difficulties here). Without KYC no one can make financial investments. KYC is demanded in the beginning of investments in mutual funds, share market, gold bonds of government, small savings schemes and demat account.
If you have not made KYC so far register KYC for monetary investments. Even the investors, who deposited in the above schemes few years ago without KYC, should compulsorily do KYC now. Investors who made KYC and invested few years ago also should verify their KYC whether it is suitable for present rules. You can visit the website address (http:// www.cvlkra.com/) to known your KYC status. The PAN number must be used to known your KYC status. If the KYC status is not correct you can amend and correct it. The form for KYC may be filled up and registered for making the correction. This is called non-financial transaction. One should not be negligent but with alertness should correct KYC. This will make further transaction easy. Otherwise subsequent transactions may get bogged down.
Ok, essential KYC has been done. PAN number is available. Correct address is maintained. If you ask me "Is that all"? I would say Yes, but to an extent. Though not compulsory, there are certain needful things which should be done in addition. Let us see what they are.
Mobile Number - Now everybody has a cell phone. People who do not have cell phones are treated as Stone Age barbarians. This cell phone number should be registered with your financial institution. One of the benefits available for such registration is the facility of SMS message sent by banks if a monetary transaction takes place above a certain amount (e.g. Rs 5,000/-). Now days we can get many services through cell phones. Bank and mutual fund transaction, current balance in mutual fund, value may be obtained through cell phones.
E-mail address - This is not so wide spread as cell phones. But it is familiar to all. If you do not have an e-mail address, obtain one immediately and register your e-mail address in all your financial institutions. From any town in any country, without the necessity to go directly or taking the torture of calling the organization’s customer service outlet, we can know the transaction details, balance and value through mail back service.
Before looking after another write up, a few words about the present social systems. As far as I know the details of financial positions is not informed by husband to wife or wife to husband or father to son. So far, in many families they do not discuss financial position with one another. There may be thousands of reasons for everyone for such aloofness. The net effect is, the deposit or asset would not reach the proper heirs and there are numerous problems in receiving the asset by the proper heirs. This is the actual truth. To avoid such difficulties, you can open a joint account operated by two, on the account opening day itself. Moreover one can register to whom and at which proportion the asset should go to heirs or nominated persons after the demise of the investor. This is the process called ‘Nomination’.
For mutual fund, share market, government gold bonds, small savings and demand account, for all these assets, register your ‘Nomination’ right now without any further delays. Many do not register ‘Nomination’. But it is highly essential. For some persons, this may present few difficulties. We nominate our relatives who are liked much by us. But after a couple of years we may develop a distance with them. This is human tendency. In such events, we can change ‘nomination’. During your life time you can change nomination any number of times. Nomination has been registered. Alright, is the work entirely over? Not at all! Why? Consider the matter deeply for some time.
Let us see regarding that in detail. We normally come across few talented clever men. They would have registered all the above details correctly. But they would have forgotten or avoided to convey the nomination details to their family purposefully. This will not give the expected effect. The asset will not go to the correct person. Did you find out why? These are well known family quarrels. If wife is nominated, daughter in law will start the fight asking why their son was not nominated. If the son is nominated, the mother’s condition will become pathetic after his father's demise. Because of these problems father does not inform the details of assets or investments to wife or children. The result is the net effect I told earlier. The legal heirs do not know the details of investments. So the investments do not go to them generally.
Simply registering the ‘nomination’ is not sufficient. The details of investments and details of nomination should be known to the heirs. For example, when head of the family / investor nominates his son, he should keep him near and inform how much money in which scheme is deposited. He can approach the particular mutual fund and receive the money by filling the requisite forms after the investor’s life.
Financial investments are not easy like purchasing groceries from a supermarket. Even if the price of lentils sky rocket, they will sell it to you if you give the higher price. At present they don’t demand PAN number for purchase of lentils. In the ongoing trends PAN is likely to be demanded. But for financial investments PAN number and many other details are highly mandatory. PAN number details are mostly familiar to many. For others, PAN is Permanent Account Number. Income tax department issues it. One person should have one PAN number only.
Alright, PAN number has been obtained. Don’t think that one can make financial investments in financial institution. The reasons are black money, Hawala which is covert transaction in foreign exchange, financing terrorist acts. The central government has made many legal procedures to stop those irregular financial transactions.
The most important procedure is KYC- Know Your Customer. This must be followed by each and every investor. This should be done before making investments. It has to be done only once. For this one needs PAN number, colour photograph and correct address proof. I repeat, one needs a correct address proof (Many face difficulties here). Without KYC no one can make financial investments. KYC is demanded in the beginning of investments in mutual funds, share market, gold bonds of government, small savings schemes and demat account.
If you have not made KYC so far register KYC for monetary investments. Even the investors, who deposited in the above schemes few years ago without KYC, should compulsorily do KYC now. Investors who made KYC and invested few years ago also should verify their KYC whether it is suitable for present rules. You can visit the website address (http:// www.cvlkra.com/) to known your KYC status. The PAN number must be used to known your KYC status. If the KYC status is not correct you can amend and correct it. The form for KYC may be filled up and registered for making the correction. This is called non-financial transaction. One should not be negligent but with alertness should correct KYC. This will make further transaction easy. Otherwise subsequent transactions may get bogged down.
Ok, essential KYC has been done. PAN number is available. Correct address is maintained. If you ask me "Is that all"? I would say Yes, but to an extent. Though not compulsory, there are certain needful things which should be done in addition. Let us see what they are.
Mobile Number - Now everybody has a cell phone. People who do not have cell phones are treated as Stone Age barbarians. This cell phone number should be registered with your financial institution. One of the benefits available for such registration is the facility of SMS message sent by banks if a monetary transaction takes place above a certain amount (e.g. Rs 5,000/-). Now days we can get many services through cell phones. Bank and mutual fund transaction, current balance in mutual fund, value may be obtained through cell phones.
E-mail address - This is not so wide spread as cell phones. But it is familiar to all. If you do not have an e-mail address, obtain one immediately and register your e-mail address in all your financial institutions. From any town in any country, without the necessity to go directly or taking the torture of calling the organization’s customer service outlet, we can know the transaction details, balance and value through mail back service.
Before looking after another write up, a few words about the present social systems. As far as I know the details of financial positions is not informed by husband to wife or wife to husband or father to son. So far, in many families they do not discuss financial position with one another. There may be thousands of reasons for everyone for such aloofness. The net effect is, the deposit or asset would not reach the proper heirs and there are numerous problems in receiving the asset by the proper heirs. This is the actual truth. To avoid such difficulties, you can open a joint account operated by two, on the account opening day itself. Moreover one can register to whom and at which proportion the asset should go to heirs or nominated persons after the demise of the investor. This is the process called ‘Nomination’.
For mutual fund, share market, government gold bonds, small savings and demand account, for all these assets, register your ‘Nomination’ right now without any further delays. Many do not register ‘Nomination’. But it is highly essential. For some persons, this may present few difficulties. We nominate our relatives who are liked much by us. But after a couple of years we may develop a distance with them. This is human tendency. In such events, we can change ‘nomination’. During your life time you can change nomination any number of times. Nomination has been registered. Alright, is the work entirely over? Not at all! Why? Consider the matter deeply for some time.
Let us see regarding that in detail. We normally come across few talented clever men. They would have registered all the above details correctly. But they would have forgotten or avoided to convey the nomination details to their family purposefully. This will not give the expected effect. The asset will not go to the correct person. Did you find out why? These are well known family quarrels. If wife is nominated, daughter in law will start the fight asking why their son was not nominated. If the son is nominated, the mother’s condition will become pathetic after his father's demise. Because of these problems father does not inform the details of assets or investments to wife or children. The result is the net effect I told earlier. The legal heirs do not know the details of investments. So the investments do not go to them generally.
Simply registering the ‘nomination’ is not sufficient. The details of investments and details of nomination should be known to the heirs. For example, when head of the family / investor nominates his son, he should keep him near and inform how much money in which scheme is deposited. He can approach the particular mutual fund and receive the money by filling the requisite forms after the investor’s life.
To summarize,
1) First level is investing money properly and earning gains
2) Second level is ensuring proper documentation, registration and maintenance of details and ensuring the receipt of funds by proper nominated heir later.
This second part is not done by many. This essay is mainly for such people. The readers of this essay should verify the registration of PAN number, KYC, cell phones number, email address, correct postal address, and nomination in financial institutions and banks. If anything is missed, you should correct them immediately register them and get your benefits.
A model form of UTI mutual fund is given here. This account has no proper details. If your mutual fund form is printed like this you should supply the information wanted in the places where “please provide” is mentioned. KYC status must be ‘YES’ or ‘OK’.
The email address and postal address change in course of time. If they are changed, register the changes. I wish to give a tip to you. If you have invested in more than one mutual funds, you need not change the cell phone, email or postal address in each and every mutual fund. Instead, if you use the “change KYC form”, all the mutual funds will receive the details of change. So, we can register all the non financial data as above, receive proper benefits.
For any queries or assistance, you can reach me to make your investment documentation up to date, to derive the benefits outlined in this article.
Labels Documentation kyc non financial transactions Nominations
For any queries or assistance, you can reach me to make your investment documentation up to date, to derive the benefits outlined in this article.
Labels Documentation kyc non financial transactions Nominations
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