Convert your Mutual funds into demat form

Do you have all your mutual funds investments in different companies and are looking for aggregating them at a common place? If so, there’s some good news for you. Now you can convert all your existing Mutual funds into demat form, which means that you can now have it electronically stored in your demat account, just like shares! Note, that once your mutual funds are in demat form, you can sell them either through stock broker platform (your demat account) or through the normal way of selling it through your Depository participant (like you do, right now.)

Advantages of converting your Mutual funds into demat form ?

1. Centralization : Once you convert mutual funds in demat form, you will then get just a single statement for your holdings. Right now, if you have investments in say 10 AMC’s, you must be getting statements from all those AMC’s. How to choose a good mutual fund

2. Monitoring : Once you have all your mutual funds at one place, you will be able to monitor them better, & you can see the performance at one go. Compare that to when they were at different places; we tend to be lazy to look at all of them and just keep ignoring them.

3. Fast transactions : : If you have all the mutual funds in demat form, you will be able to sell those mutual funds in stock markets whenever you need money. Mutual funds are now, tradable in stock markets, so you can buy and sell them in stock exchange in real-time. If you don’t have them in demat form, selling them would not be as convenient.

Steps to convert your Mutual funds into demat form

a) Obtain and sign DRF : The first step, is to ask your demat provider (like ICICIDirect, Sharekhan, Reliance Money) for a ‘Dematerialization Request Form’ (DRF) for conversion of mutual funds units held in physical form into demat form. Obtain it, duly fill it and sign it. You should be able to find the DRF form at your demat provider website. [DDET Click here to see a Sample DRF form]Convert your mutual funds into Demat form [/DDET]

b) Sign all the statement of Accounts from your Mutual Funds : You will have to collect the statements from all the AMC’s which have the mutual funds names which you want to convert, once you have them, you have to sign it. You will get all these statements in your email box most probably. This step is important to make sure you have documentary proof that you own those mutual funds and have their names, so if you have investments in 5 different AMCs, you should collect all 5 statements.

c) Submit and Acknowledgement: Submit the duly filled and signed DRF along with and Account Statement issued by the Mutual Fund House to the Depository Participant. Acknowledgement will be given by the Depository Participant for the document acceptance, subject to verification.[DDET Click Here to see all Important points before submitting a Dematerialization Request]

1. The investor should check with their Depository participants (DPs) for the dematerialization Request Form to convert mutual funds units held in physical form into demat form.

2. The details in the DRF, i.e. Name(s), holding pattern and signature should match with the details as appearing in the account statement.

3. The form is duly filled and signed by all unit holders as per the holding nature and is complete in all aspects.

4. All the schemes as available in a folio are mentioned in the DRF and the unit balances as specified are matching with the closing balances available in the folio. No partial units or selected schemes available in the folio will be accepted for conversion.

5. Units requested for dematerialization should be should be free from credit hold, lien or any other hold. In case any units are under hold for want of credit status, conversion will be processed only after clearance of such hold.

6. Dematerialization request should not be submitted if the units are lien or locked for any Income Tax or other legal purpose.

7. Rejection letter will be sent by the Depository Participants if the documents are not in order, units are under lock, or rejected by the Registrar during the conversion process providing reason thereof.

8. Investors can check with their Depository Participant on the status of the request if no intimation has been received within twenty-one days.

9. No separate confirmation letter will be sent by the Registrar for successful transfer of physical units in demat form.

10. Post dematerialization of units the investors can only transact through the stock exchange platform. They will have to approach their broker for purchase / redemption of units.

11. Physical requests received by the Registrar of DSP BlackRock Mutual Fund for purchase/redemption of units will be rejected.

Source : http://www.dspblackrock.com/services/dematerialisation.asp

[/DDET]

d) Processing : The Depository Participant will process the application for conversion of physical units into electronic form. For this, the DP would sent the request form and Statement of Account to the Asset Management Company (AMC) / Registrar and Transfer Agent (RTA).

e) Confirmation : The AMC / RTA will after due verification, confirm the conversion request sent by your DP and credit the mutual fund units in your demat account.

Selling Mutual funds in Demat form

Note that converting the mutual funds will require you to have a demat account first, so incase you don’t have a demat account , you will not be able to convert them , because unless you have a demat account, how can it be stored . Now once you have converted the mutual funds in demat form , you can sell them through your demat account in stock market , which would attract brokerage as per defined by your Depository participant, however you can also sell your mutual funds through the normal old way where you put a request for sell through a Redemption Form .

Conclusion

This is one of those simple and small steps, towards simplifying your financial life. Once you do this, it can motivate you to take further steps in automating many things which will improve your financial life. Dematerialization of mutual funds will make sure your documentation will improve . Let me know if you plan to do this on comments section .. also lets discuss if anything is not covered in article . Has anyone done this already ?

110 CommentsAdd Comment

  1. RahulT

    Recently I purchased MF from one agent, at that time I didn’t knew we can have that in our share trading portal as well, now i wish to get from his associate company to my existing trading portal, whats the procedure for that

  2. venugopalaswamy

    sir,
    my father and mother was expired. but i know that he has TCS e-serve shares. folio number is 034884 and there is no demat account. As a legal hair i want materialize those shares . please let me know the complete procedure. how many shares he hold. what is the worth of shares. is there any guinion consultancy for take up shares

  3. I have UTIMF Opportunities fund -dividend payout, total 1615.3 units purchesed on my wife`s name and me, 1) VecireddyVeasantha 2) Vecireddy Rajareddy and we have Sharekhan demat account with names 1) Vecireddy Rajareddy 2) VecireddyVasantha. I sent this SOA copy along with filled request form in triplicate and filled and singed TRANSPOSITION FORM for demat to the sharekhan.com but they rejected it with remarks that ” the name of the holders on the SOA should be in the same sequence as in demat account”
    Give your sugesion for demat my MF
    regards
    Rajareddy

  4. pankaj

    Hi,

    I have purchased mutual fund via online through AMC website. This purchased as direct fund(NO Broker) ELSS. I have also given option during the purchase that to credit Unit into my DEMAT account. I have filled the client id and DP Id. But after 20 days it has not been credit in my Demat account(ICICI Direct).

    Regards,
    Pankaj

  5. ps486

    hi

    i have transferred my (demat) mutual funds to a new broker , which do not provide a facility to sell MF\’s.

    How can I redeem the funds.Is there any other way.

    Thanks in advance

  6. Diwakar

    Hi Manish,

    My father was holding mutual funds of different AMC’s in which my mother is the nominee. All the MF’s are in physical form. Now after his death what is the procedure for transferring all his MF’s into my mother’s demat account. My mother has a demat account with ICICDIRECT.com

    Diwakar

  7. Chander

    I was pondering if dematerialization of FMPs are allowed?
    and if yes, would it be possible to liquify holdings in FMP through stock exchange route , are there enough volumes?

    • Lata

      I have approx. MF of 15 lac of different AMCs which I wish to dematerialise to my icici demat a/c.
      What charges are involved for same and once demat done, what are the charges for selling through icici demat a/c. ?

      What are the disadvantage of dematerialising mutual funds of different AMCs in one demat a/c. ?
      Pl guide.

      • For what reason you want to dematerialise it in demat account. Right now anyways you can do online transactions if you want.. If they are bought by agent, anyways you can open an online account with respective AMC’s and sell them online, or you can consolidate all the funds with fundsindia at one place. Why pay demat account charges :)

  8. Prashant

    Thank you very much. I was so confused regarding this.

    I was keenly looking for such option so that I can use it as a Margin.

    Thank you once again.

  9. Jeetu

    While purchasing it from online platforms like fundsindia or moneysights…
    Do we get an option to get it directly in demat form?

    If no, then, whether one gets physical form of MFs or what?

  10. Guest

    If you don’t have a demat account already then there is no point to open one just for the sake of converting your mutual funds into demat mode. Demat account is not free. When you open demat account you pay opening charges, when you transact you pay transaction and brokerage charges and you also pay annual maintenance charges. This is extra burden for one who just want to hold mutual funds. Now if you already have a demat account I see the following impact.

    When you make a request to convert your mutual fund units into demat mode you are actual giving dematerialization request to your trading account provider. This is similar to conerting some old physical shares into demat mode mode. So you will pay the charges for the dematerialization request.

    Both CDSL and NSDL will charge some transaction charges if you add or remove anything from your demat account. That means you will pay these charges everytime you buy mutual funds. If you have SIP then you will pay these charges every time you get new units added to your account. These charges also apply when you sell your units.

    brokerage, STT, service tax will apply on anything that is traded in demat account. So if you buy/sell mutual funds using your trading account then you will have to pay these charges.

    Generally people holds mutual funds for long term. If you want to close your demat account in future for some reason then you cannot do it unless you sell your mutual funds or convert them into another format. I know a lot of people who closed their demat account because they no longer want to stay on risky markets. Having mutual funds in demat mode will become a constraint if you don’t want to maintain your demat account.

    If you have Wipro and TCS shares can you nominate your father for Wipro shares and brother for TCS shares? No, you cannot. That is what will happen for your mutual funds also. You can nominate different people for different mutual funds. You cannot do that once you convert mutual funds into demat mode.

    The above may be true for your bank account as well. The bank account on the demat account will become the account for all mutual funds.

    The only advantage of holding mutual funds in demat is that you can see them all at one place. If you have same email address on your mutual funds then there are alternative ways to achieve this. Also it is never wise to place all your investments at one place. By doing so you just make it easy for people like IT department, credit agencies etc.

  11. Girijesh

    Dear Manish,
    I want to know that, if i purchase funds through demat account (share khan).
    Is there any breakage charge (means first take charge by Broker and then fund house) .pls clear it.

    thanks.

  12. Nitin

    This would be more usefull perticularly for people investing in SIPs. Also once your Mutual fund details are authenticated by your Demat firm, you can rest assured with your financial status for years.
    Sensible move get them converted.

  13. Avinash

    I have Mutual Fund in Sharekhan in “RTA” format and would like to transfer it to SMC Global Securities and close Sharekhan Account.

    As per Sharekhan until the shares are in their account they wont be able to close it.
    Sharekhan states, since MF is in RTA format, you cannot transfer the share and would have to convert the MF from Online to Offline,
    which I don’t thing makes sense.
    ShareKhan is unable to provide any good answers.

    • Avinash

      This seems to be unfair practice . there is no reason why they should not be able to transfer it .. but I would recommend you to follow a more simple ting . just sell off all your mutual funds at sharekhan and then buy it again at SMC , are you getting too much profit and taxation issue is there ?

      Also do one thing , tell Sharekhan to give what they are saying in writing and put a cc to SEBI email

      Manish

      • Avinash

        Thanks a lot Manish for your quick reply.

        Few of my MF are ELSS(locked for 3 yrs), and some of my MF attract exit load of 1%(purchased 10 months back).

        Funny thing which ShareKhan stated is that I have all the MF are in RTA format and cannot be converted to DMAT.
        Any new MF folio you will open will from now be in DMAT format.
        They are really confusing me, and want me to change it to offline.

        Could you shed some light on the following

        1. Can we convert MF in RTA form to DP form. Any charges ?
        2. Can we transfer MF in RTA form from one depository to another in case of account closure with First depository.
        3. Is it really required to convert MF to DP form for transfer from one depository to another.
        4. In case if I do not like to convert MF to DP form and close the depository account(i,e, directly will transact with AMC), is it necessary to convert MF from online to Offline ?

        Answers to the above queries would be highly appreciated.

        There is same info on whether you should HOLD MF in DMAT format, which might be also good to read for the investors.
        http://www.moneycontrol.com/news/mf-experts/should-you-hold-mutual-fund-unitsdemat-form_538308.html

  14. raju

    Sir,
    At present I do online purchase and redemption. Is it possible to do that after getting them into demat form?
    In case of Liquid funds daily dividend reinvestment, what will happen to demat a/c will there be an entry for each day in the demat a/c?
    I have all the units in two or three holders name with either or option. In case of demat all the holders have to sign for purchase or sell of units, is that right? In that case it is more cumbersome to deliver the slips daily signed by all the holders.
    Is it possible for you to guide us on how the pruchase and part redemption of Demat MF units takes place?
    Thanks
    Raju

  15. Sooraj

    Hello all,
    I have a SBI Magnum and a Sundaram Paribas MF.
    I would like to consolidate them into my DMAT account ,as explained well in this article.
    I have a question regarding this. Will my Mutual Fund agents will be still eligible for the Trail Commission if Im doing so?
    In my case I purchased SBI MF from their MF head office and so I guess I don’t have an agent in that deal.Infact i remember them telling that they wont charge anything as agent commission since i bought it directly.
    But in the case of Sundaram Paribas, I bought it in an ICICI bank and hence they are agents. Please correct me if I am wrong.

    • Sooraj

      You dont have to worry about trail , because it is part of fund management charge and it is cut anyways , wheather you go by an agent or without agent , so dont worry on that .

      Note that dematerialization of MF is just to convert them in Dmat , it does not mean anything else

      Manish

      • Sooraj

        Thanks Manish for a very quick response :)
        But what about buying the mutual funds from their offices itself? Can we really avoid the initial commission..im planning to buy canera robeca MF directly from their office in bangalore, with an expectation that I can avoid agent commission.
        Honestly when there are dedicated portals like Jagoinvestor available, I believe I dont want an agent for personal financial planning :)

        • Sooraj

          You have to understand first that which commission are you trying to avoid ?

          The first commission is paid by you from your pocket to agent , incase you feel he is doing a good job , like to an individual you pay Rs 100 for some work , or you pay ICICI direct Rs 30 for each SIP , thats something you have control on and you can avoid .

          but the second kind of commission is trail commission which an agent gets from AMC , which is paid out of AMC charges ,which is cut from NAV , now if you go with an agent ,that agent will get the trail . if you go directly , the trail is with AMC , but for you it is cut always .

          Manish

  16. Ravi Shankar Kota

    Hi Manish ,

    I am about to start investing in Mutual Funds.Is it better to take a DMAT account first and then buy ?I want to take indiainfoline service for DMAT.
    Can we take SIP also through DMAT?
    Please suggest the best options and ways to invest.
    Please suggest some good SIP plans to start.

  17. Janki Makhija

    My sister (since deceased) held units (with me as jointholder) in Principal Mutual Fund under A/c. Nos. 13625814 & 13625771. After her death, I wrote to the MF asking them to delete her name and to send me current account statements. Inspite of writing to them thrice and their promising to send me the statement, they have not done so. Please help me in getting these statement from Principal Mutual Fund.

  18. Dinesh

    CAMS has started an active statement which consolidates all the MF companies they represent. Along with KARVY and FTML nearly all the major MF companies are covered. Later they plan to start online purchase and sale of units. All this does not incur brokerage.

  19. Chidu

    The best way to track all MF investments is using CAMS or Karvy that provides service for all MFs (Excpet Franlin Templeton). You can have a consolidated view using email id. If you the same email id for all family members, then you can track the entire holdings here. Both of them provides option to cover all folios managed by CAMS and Karvy. You can track transactions, returns, capital gains, etc. The main advantage is you don’t have to key in anything.

    https://www.camsonline.com/default1.html
    https://www.karvymfs.com/platformservice/

  20. Raj

    I have mutual funds thru HDFC ISA account (Investment Service Account). It has consolidated portfolio with online buy and sell options along with SIP facility.
    Are they said to be in Demat form? I can sell or buy online, what difference it makes from Demat form?

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