Frequently Asked Questions on SIP

By Suresh Parthasarathy

I invested in a Systematic Investment Plan (SIP) in a tax-saving scheme (ELSS) in July 2009 for three years, ending July 2012.  I am unable to redeem my total investment, even though three years have elapsed. The Mutual Fund says the units are under lock-in period. Can you explain what this means?

When you invest in a tax-saving ELSS scheme through the Systematic Investment Plan, the Fund treats every installment as a fresh investment and locks them for three years, which is the guideline for ELSS. Each investment must be held for three years.  In July 2012, the three-year lock-in period is over for the first installment. You can redeem these units. The subsequent installments are still locked-in. The last installment, made in July 2012, will be available only in July 2015.

Also, in the tax-saving scheme, every time the fund declares a dividend and reinvests it, this is also treated as a fresh investment. Let us say you invested in March 2009. The fund declared a dividend the next year and reinvested it. This money is treated as a fresh purchase. You have to hold it for three years, till 2012. Every time the fund declares a dividend and reinvests it, this becomes a fresh investment and will be held for three years.

If you don’t have the time to monitor these, the best thing you can do is to change the option from Dividend Re-invest to Dividend Payout. This way, there will be no lock-in period. All you have to do is send a letter to the Fund or the Registrar.

I would like to see the Net Asset Value of my investment every day. Where can I find this information?

AMFI or The Association of Mutual Funds of India publishes the NAV of all funds daily. Log on to http://www.amfiindia.com .

You can also go to www.camsonline.com à Online Services for Investors à NAV Information and subscribe to receive NAV details through your email on a daily, weekly, fortnightly or monthly basis.

I switched from Dividend Option to Growth Option in a particular scheme. It is the same scheme, yet why was sales tax deducted as if the money had been redeemed?

Mutual funds treat the Growth and Dividend Options as two different schemes. Changing from one option to the other is considered a switch from one scheme to the other. Such a switch means the fund redeems the investment in one scheme and purchases units in the other. Current tax guidelines require it to be treated this way, and tax deducted for redemptions. That is why the fund deducted STT in your case.

I invested in two funds and want the account statements. But I don’t know the folio numbers. Can I still get the statements?

Yes, you can.  Call the toll-free number of the registrar or the fund. Give your name, PAN number, and other details the official may ask, such as the city where you live, the postal pin code. The official needs this to establish your identity. Once that is done, the fund will send you a statement.

A better option for you is to register your email ID with the fund. You will automatically get statements from the fund. You will not have to remember the folio numbers!  You can also go to www. Camsonline.com and use the mailback facility there to receive statements. That happens in just minutes after you register. You can also get a consolidated statement of both funds through the registrar.

I want to change the holding from “Joint” to “Either or Survivor”.  Is this possible?

Of course, it is possible. All you have to do is send a written request and have all the holders sign it.

Can I add the name of my spouse as a joint holder in my folio?

Most Funds will not allow you to do this. You should have done this at the time of applying. The funds will not allow you to make subsequent changes like this.  They also will not allow you to delete the name of a joint holder from the folio if that person is still alive.

Funds also do not allow the names of the first and second holders to be switched or interchanged. This is called transportation of names.