3 Investment trends you must avoid!

Do you ever wonder how some people invest in just the right things? And that their investment decision never yield bad results? This may be a bit too far-fetched because every investor makes some mistakes and learns from it. But the best way to be a good investor is to learn from other people’s experiences and make the most out of their advice. Life is after all too short to learn from your own mistakes!

Below are the three investment trends you should avoid if you are investing for profit and growth:

Investing in Brand Names:

Most of the investors are generally involved in making this mistake. The dazzling image of the company leads people to believe that the stocks are more profitable. But this is just a false front and many brands are in deep trouble underneath the surface. If it is long term security than the brands are a good place to invest because they well-established with large capitals but they are not a very smart investment opportunity in terms of profit and growth.

These stocks are less risky, so they should occupy a small portion of your overall collection. With overvalued stocks, there lie little growth opportunities and hence, avoiding large investments is the key if you are investing for profit and growth.

Investing in Penny Stocks:

Penny Stocks have little capitals invested in them and hence, they fetch little profit and their trade price is also low. These stocks are risky for investment because they are controlled by sizable traders. Penny stocks are terrible options to both, invest or trade. The reason for the growing investment in penny stocks is because of the thinking that bulky investment can be made at cheaper cost with high selling price to yield maximum profit. The investors based on this knowledge make large investments that prove to be fruitless most of the times. Because of the lack of right management, this is an investment you should avoid under all circumstances.

Overlooking Stock Value because of Price:

This is the most common problem with investors who are new to the market. Quite often these investors gamble in stocks with luring prices but there’s no actual market value to the stocks at close inspection. Without proper market analysis, the stocks look like a successful investment plan with a high yield promise. But behind the entire glamor, these stocks are quite unstable and are not a very good investment opportunity. You should properly evaluate the background of the company and try to know the actual stock value instead of going for the deceitful price.


Savings: What’s your perspective?

coins-1523383(Image source: Pixabay)

Recently, A young enthusiast asked me about the importance of saving. His parents asked him to start saving but he (like most of us during youth) want to enjoy present life and didn’t want to give up on any comforts for the sake of future. Well, to some extent both (in their shoes) are right. Savings is essential but it does not mean that you should sacrifice on each and every thing, otherwise money will become definition of your life. It also does not imply that you start enjoying present without giving thought to future.

There are negative effects to both sides: Savers often end up with ‘regrets’ and spenders with ‘financial problems’ in future. What is required is equilibrium which can be answered by How, When & Where to save.

Let’s take a look –


Does more earning mean more savings? That does not make sense always. Have you ever noticed why some people are very good at saving and others find it difficult to save?  It depends upon personal money handling habits. To an extent saving habits depends on your brought-up, cultural factors. However, psychology decides the way you look at money. There are savers and spenders. Spenders love to spend money on current to enjoy life rather than saving it for future. They find their happiness in buying and comfort. Savers on the other hand – don’t enjoy losing money and gets excited when they see their savings grow.

If you are a spender then try to make your transactions in cash or debit card. Keep credit cards usage limited. A few changes like cutting on trips to grocery stores, unnecessary entertainment, Budgeting for expenses, keeping fixed cost low can help a lot in saving money.


Saving at right time is very important. Moving a fixed part of your salary as saving on regular basis can help you save better and automatically put limits on your spending. If we go by thumb rule then 25% of your salary should go to savings but not less than 15%. These days it is often known as ‘Pay to yourself first’. This small step can save and accumulate large sum over long term (compounding).


Saving in right instruments and doing the right purchases could help you save more. Buying in bulk/wholesale for nonperishable products will give you happiness of buying right and saving money. However, there are certain areas where saving money should not be given importance e.g. cheap products for health, food. This will often end up with high expenses towards health and Doctor visits. Health is wealth and therefore where to save is important to understand.

Don’t make savings “goal” of your life but accept it as a part of lifestyle so that it will not be stressful.

Happy Savings!


Mutual Fund SIP: Things to know before investing.

Mutual Funds Systematic Investment Plan (SIP) is a great way to start investment in mutual funds. It offers you to invest a fixed/pre-determined sum of money on a regular basis (monthly, quarterly) in mutual fund schemes. Some features of SIP like Rupee cost averaging, regular savings, compounding returns makes it a very attractive option of investment.

However, there are certain things which every investor should know and understand before taking the first step. Below is my attempt to cover some of important points to make that decision.

Goal Based Investing:

Investing without goal is like a construction without base. Do not invest your money on anyone else’s recommendations or only because your friend/colleague is investing. Invest with specific goals or objectives in mind. Setting up goals can help you make a proper plan with all the details like time horizon, amount required to invest, risk capacity etc. It will also help you in choosing suitable scheme.

When it comes to selecting the scheme, many investors often get confused and end up investing in the scheme which is recommended or listed with tags like “best Performing, Star rated Fund, proven past records” etc. Investors should understand that these are not the ONLY criteria’s for selecting a right scheme. Also, it’s not about “best scheme” to invest but it’s about selecting a scheme which is best suitable to your goals, risk capacity, duration and other needs.

SIP is not an investment strategy:

SIP is a way that helps you save regularly and accrue money to reach your investment goal. It is not a strategy to gain high returns.

SIP works best for long term:

SIP is recommended generally for long term as compounding works better when duration of investment is longer. However, that doesn’t mean that you should be invested for “long duration”. Monitoring your funds, its performances and making necessary changes when required is also very important.

SIP is not a way to reduce market risk and loss:

As mentioned earlier SIP is a way to invest in mutual funds i.e. indirect investment in stock market. Therefore, the risk of market volatility is inherent and chances of loss is also inevitable. But when you investing through SIP, you are lowering the risk of your investment over a period of time.

SIP is not always suitable for all types of mutual funds:

Mutual funds investment is subject to market risk and hence investing for long term in equity market is always good. Doing SIP in equity funds is better due to market volatility but it is not always beneficial with Debt funds for short duration.


SIP in Equity Linked Savings Schemes (Tax-saving Scheme) gets little confusing due to its lock-in period. Income Tax regulations states that if you want tax exemptions, you should be invested in ELSS schemes for at-least 3 years and the amount should remain invested for a minimum period without any withdrawals.

Therefore, when you invest in ELSS through SIP mode your each installment is treated as fresh investment and hence gets locked for 3 years.

Remember, your mutual fund portfolio should not consist of only SIPs but some lump sum investments too. Like I said before SIP is always not suitable to all types of mutual funds and for every goal.

Hope my points will help you make the right decision. Happy investing!

2015 in review

The WordPress.com stats helper monkeys prepared a 2015 annual report for this blog.

Here’s an excerpt:

A San Francisco cable car holds 60 people. This blog was viewed about 2,100 times in 2015. If it were a cable car, it would take about 35 trips to carry that many people.

Click here to see the complete report.

Investment Opportunities in India for NRIs.

Recently, the steps taken by Government of India has not only motivated Foreign Institutional Investors (FII) but also NRIs Investors. Indian Government is now promoting and providing good investment opportunities to NRIs.  The good thing is NRIs are equally excited and wants to invest so they can contribute to the growth of Indian economy. However, many don’t have a clear understanding on what’s available on the plate. This is my attempt to add some insights –

Equity Investments:

NRIs can invest in the equity markets of India under the portfolio investment (PIS) scheme of the Reserve Bank of India. PIS is a foreign investment route to simplify the process of registration and investment for all foreign investors.

Under this scheme Non-resident Indian can purchase or sell the shares/convertible debentures of the Indian companies on the stock exchange. There are 3 simple steps after which the NRI can start trading in Indian Stock Exchange.

  1. Open Bank Account: First step is to open an NRE or NRO account and then need an approval under PIS which allows you to trade in stock market. For the NRIs who already have NRE/NRO accounts, he can assign it as PIS account.
  2. Demat Account: Second step is to open a Demat Account to hold shares and
  3. Trading Account: Trading account (linked to PIS account) with an authorized broker of SEBI.

Today many banks offer help in this process of account openings and PIS Approval. Some important points to consider in regard to equity investment by NRIs are:

  • An individual can only open one PIS account for buying and selling of shares.
  • There are some ceilings on investments under PIS which are monitored by RBI.
  • NRI can transact only in India through SEBI authorized broker.
  • NRIs cannot do intra-day transactions. In simple words, NRIs can trade on delivery basis.
  • Short-selling of shares is not permitted to NRIs.
  • NRIs cannot trade in all Indian stocks. RBI publishes the list of stocks to invest that are eligible for NRIs.

Mutual Funds:

Another option available for investment. This option also delivers high returns to the investors. You can invest in the Indian mutual funds through your NRE/NRO account. NRIs from most of the countries can easily invest in Indian mutual funds. But the NRIs in US or Canada cannot invest in Indian mutual funds. As per the rule laid out by US securities market regulators, only those fund houses, globally or locally registered with Securities and Exchange Commission (SEC) can accept money from US NRI / citizens. However, US based NRIs can invests in the India dedicated mutual fund schemes or India dedicated offshore funds. These schemes are managed in the US but invests in the Indian based companies.

Exchange Traded Funds (ETF):

Exchange traded funds can be traded same like stocks on the exchange. Some countries like US, UK allows you to invest in ETFs in Indian stock market. But if you want to invest in Indian based ETF then it carries market risk with an additional risk of currency fluctuations.

Real Estate:

Real estate is one of the favorite option of investment for NRIs. There is not much restriction on the investment in the residential or commercial properties in India but they cannot invest in the agriculture land, farm house or the plantations in India or can own such property only if they have been gifted or inherited.

All the transactions related to money is in the Indian rupees and follow the normal banking channels using NRI account. NRIs can also avail the home loan facility from Indian banks or financial institutions after satisfying the eligibility criteria. The loan amount and repayment transactions is in the Indian rupees.

There are a few things which you should take care of before investing:

  • It’s always recommended to hire a lawyer or legal advisor who can help with all legal process/documents and clear titles. Don’t make deals only through the builders or brokers as there are chances of cheating or delays or misleading information. Going through a proper channel helps avoid unnecessary mental stress.
  • Be prepared with your exit options well in advance. Selling of property comes with some restrictions by FEMA (Foreign Exchange Management Act), especially in repatriation transactions.
  • Remember to grab ‘No Dues Certificate’ from the seller and do a check that property have all required approvals from civic authorities for construction.

NPS (National Pension System):

NRIs are eligible and now can invests in the National Pension Scheme for their retirement objectives. RBI recently allowed NRIs to invest in NPS which is governed and managed by Pension Fund Regulatory and Development Authority (PFRDA). The minimum subscription is Rs. 6000 and it will mature when investor turns 60 of age.

Subscription amount should be paid through NRE/NRO/FCNR accounts find and there will be no restrictions on repatriation of the annuity or collected amount.

I would suggest to invest in NPS only if you are going to settle in India during retirement. NPS is a complex product and not tax efficient.

NRO/NRE Fixed Deposits: 

This investment options looks really attractive because of the higher rate of interest it offers. The money held in the deposit will be in the rupees. Investors can freely remit from NRE account but not in NRO account. Interest earned is tax free in India but it may be taxable in the country where you are residing.

In 2015 annual budget, a new investment option was introduced called Real Estate Investment Trust (REIT) for investment and it also allows NRIs to invest in. REITs are not new to the other countries but due to tax complexities in India it is taking time to start. Due to relaxation in FDI norms and upcoming smart city projects this option of investment looks very attractive.

There are also a few other options like – Company Deposits of public/private companies, money market mutual funds, Convertible and Nonconvertible Debentures, Government Securities Bonds Etc.

Choose the investment option which suits your needs, do consult with your tax advisor before investing as many above options are eligible for long term & Short term capital gain tax. Also, many countries have double tax avoidance agreement with India therefore all earnings from India needs to be part of calculating total tax liability.

Disclaimer: Above article was written purely with purpose of sharing information. Do not make any decisions solely on the basis of above and do consult with your Tax and investment Advisor before investing.


  • Economic Times
  • Livemint
  • NSEindia
  • Business Standard
  • Moneycontrol


Ladies, Boost your Confidence in Financial Matters!


According to studies Women lags behind when it comes to managing money or investments. In many cases, Women prefer a ‘supportive’ role in financial decisions and one of the reason for this is – “lack of confidence”.

Why is that? Well, There could be many reasons for this lack of confidence e.g. fear of losing money, low financial literacy, less interest in finance, finding it hard to understand, etc. But actually, money management is not that hard. What women need is to engage herself more in investing and money matters and boost her confidence!

Let’s see how we can achieve this.

Work on your Basics:

Building financial knowledge through right medium is the first step. Reading books, attending seminars, workshops and discussing with financial planner are some of the ways of getting this knowledge. There’s a ton of websites, financial blogs (including mine) which can guide and provide information about investment and investment products. Also there are lots of online tools or mobile apps which helps you understand how to manage money and teach about planning, budgeting in a very simple way.

Take Baby Steps:

Getting only educated in investments will not solve the purpose but actual small steps can help get comfortable with it. Start investing in monthly savings account or mutual fund SIP. With minimum investment on monthly basis it can help build confidence and money.

Save for Yourself:

Rightly said by Clare Boothe Luce “A women’s best protection is a little money of her own”. Saving money for yourself is not a bad idea. Good news is, Women are great savers as compared to men and can also take more risks because women tends to do investments with long term overview.

Build your own Credit Identity:

Having a separate credit card for women might be a debatable question. But it is important to have a credit card to learn how to manage credit and about credit history. Secured or prepaid credit card can serve the purpose to initiate. But it definitely start to build your own credit history and identity which is useful in future.

Talk to your Adviser:

Discussing with experienced adviser before making an investment or if you have any queries/doubts, could assure you about your right decision. Some suggestions from adviser will definitely help you understand the process and get you prepared for the results. Also, discuss with your partner/father, it will not only make you confident and comfortable but their past experience can save you from doing mistakes which they had already made. Share your decisions with family to make you a part of family financial decision making.

Lessons Learnt:

Investment and money matters is vast and wide subject. It takes time to understand and learn things. Also Market conditions changes frequently so if any of your decision gets wrong don’t panic, mistakes happen. Don’t let your decisions hamper due to mistakes you made. Treat them as lessons learnt and keep track of it.

I hope these points will help you boost your confidence and get you in ‘decision making’.

Happy Investing 🙂 !

References : US News

What Exactly Is Personal Financial Planning?

Financial Planning defined as ‘A Process to achieve your financial goals with high returns by minimizing risk’. But what exactly the Financial Planning Process means? Does it means savings & investment or choosing product/ services for investment? Or asset allocation & diversification? How and where to start? I can go on and on. Further, if it is a process then what are the main components of the process? Let’s try to understand this process in simple stages.

Savings Planning:

It is the first component of financial planning. To save money, a right spending plan (income and expenses) is necessary. As we all know, income resources are very limited but expenses are not, therefore minimizing expenses is the best way to save more money. Developing a budget for every expense, liability & debt is necessary. Keeping aside a fixed sum of money each month as savings is an effective idea.

Also, there should be a purpose of saving like buying a car/home, child education, marriage etc. Identifying savings purpose will help determine the duration and how much money is required.

Insurance Planning:

Insurance planning is the second component of financial planning. There are different life stages – like a person who has just started earning or a person with family/dependents or a person approaching retirement and post retirement. At every stage insurance is important!

Insurance is not an “Investment” but a necessity. Before going for insurance, an Investor must take into consideration his needs, goals and his ability to pay the premium amount. Choosing a policy suitable as per needs helps achieve goals smoothly.

There are different types of insurance policies available in the market. Main ones are:

  1. Term Insurance: It is a pure form of insurance. It gives full protection against death as well as total & permanent disability. This insurance is a ‘must’ in every financial plan and at any life stage.
  2. Health Insurance: Health insurance covers you and your family from financial loss due to critical illness, accidents or disability. It also provides income when disabled or covers cost of medical care.
  3. Whole life Insurance & Endowment: These insurance policies are for protection and investments. This is a product where you can get insurance protection and part of money goes into investments which generate returns.
  4. Unit Linked Insurance Plans (ULIP): Unit linked insurance plans are the most popular insurance plans in India. It gives the benefits of investment, insurance and tax. But this is not the pure insurance.

There are various factors which impacts selection of a right insurance policy. Some of them are:

  1. Age.
  2. Income.
  3. Budget for different policies.
  4. Number of dependents and their age.
  5. Standard of living
  6. Amount of debts/Liabilities
  7. Savings

By taking into consideration above factors one can make insurance planning a breeze.

Investment planning:

Investment planning is third component of financial planning.  This requires a lot of research and dedication. Before making any investments you need to assess some factors which are (but not limited to):

  1. Risk Capacity– Determining risk capacity for investment helps you choose right products. For risk averse investors debt securities are suitable while investors with high risk capacity can invests in equity.
  2. Investment Horizon: Investment horizon or time period for investment can help a lot in getting higher returns. Longer the period of investment higher will be the returns while risks gets lower. Young investors have longer time horizon available.
  3. Asset Allocation: Asset allocation is a technique to balance risk and diversify investment by making a portfolio of different asset classes like debts, equity, real estate and liquid assets.
  4. Diversification: Diversification is an extension of asset allocation. It’s a method which helps to minimize risk and earn high returns.

With the above factors as a guideline, one should also consider the life stages as one important aspect.

See you later!


Source: Internet.

Why Women Should learn to manage Money?

We all know Women are good in multi-tasking 🙂 ! The way women handles house and work proves the very fact. However when it comes to manage money many still prefers to hand it over to men.

These days, Women is capable of generating their own incomes but unfortunately she lacks the seriousness about saving and investing money. They should take control of the money and should also learn to take some good investment decisions.

This is my attempt to spread some thoughts about why women should manage money:

Reason 1#Women lives longer: Generally speaking, women tends to have longer life span as compared to men.

Also having a dependency on family member for financial assistance at later stage of life is not advisable and understanding this risk is more important. Women have longer period of health issues in old age. Therefore health benefit costs affects more to women than men as income tends to have low or sometimes no income at this stage of life.

Reason 2#Emergencies or situations: In situation of a sudden death of a life partner; a women is less likely to be fully aware of his partner’s investments and financial situation. Even if women handles day to day expanse and bills of home she is hardly aware of how financially secured her future is. Some real life situations like this make women to go for finding solutions. Financial world is getting complex day by day with new innovations so it might be difficult if a person suddenly get pushed into it…unprepared. It’s really a need that a women should take interest and participate in the decision making of each financial matters of home.

Reason 3# Women earns less: Women in general (I may be wrong) earns less as compared to men and mostly all her income goes in home expanses and therefore savings hardly turns into investments.

Reason 4# More breaks in profession/career: Women takes more breaks in her career than men. These breaks are often long term like break after having a baby, after marriage or due to change in city. It also gets secondary due to women are not main earners in the family but ‘supporting’ role or taking part-time jobs. But this can badly affects not only her earning capacity but also in managing money affairs.

Reason 5# Single/Divorced women: Divorced women suffers more financial burden than men because of inequality of income and this burden increase when if she gets the custody of kids. After divorce as a single women with or without children have to take control over finances, manage day to day expanses, and pay bills and to save for children education/marriage and for retirement too.

Reason 6# Boost financial confidence: In general, women find investment decisions more stressful and difficult to handle due to low confidence and lack of financial knowledge. Women also finds it less interesting to discuss and learn about money or financial matters. Even women who are well educated and successful professionally lacks financial literacy and depends on their husbands or hire professional advisors for investments.

The fact is women has a tendency in saving and can take more investment risks than men. The only thing that is missing is proper education to boost confidence. It doesn’t require a professional degree to learn about handling money and investments. There are many resources available to help women get educated. There are many websites, financial blogs (including mine) which provides all information like basic rules of investing, information about financial products and services, tools and calculators, budget worksheets etc. Online money tools are of great to use and easy to learn. Taking consultation before making investments can also help to make better investment decision. With every such decision will surely boost your confidence and even if you made mistakes don’t stop… consider it as a lesson learnt !

So…stop giving excuses and start building your financial future…Secure.

References :

  • New York times.com
  • Forbes.com

Systematic Transfer Plan Of Mutual Funds: Strategy for safe investment

Mutual Fund’s Systematic Transfer Plan: Strategy for Safe Investment

Under Systematic Transfer Plan or STP, an earlier invested lump sum amount in a scheme can be transferred systematically to another scheme of same fund house at regular interval. In other words, under STP an investor can give instructions to mutual fund AMC to transfer a fixed sum of money or specific number of units from one scheme to another scheme on monthly, weekly or daily basis.

STP is offered in two variants – Fixed STP and Capital appreciation STP.

In Fixed STP, Investor chooses to transfer a fixed sum of money from one scheme to another while in Capital appreciation STP investor invests only a part of profit to another scheme i.e. profit earned on the principal amount is transferred to another scheme .

STP from Equity scheme to Debt scheme works best for those who want to enjoy the growth from Equity along with capital protection from debt or liquid funds.

Here are some of the benefits of STP:

  1. Systematic transfer allows investors to earn capital growth with low risk.
  2. It comes with advantage of Rupee Cost Averaging by buying more units at low cost in down market and vice versa.
  3. It benefits Investor with dual advantage of Equity and Debt Investment and helps balance the Portfolio.
  4. It helps Investor take advantage of market conditions like if market is volatile then investor can gradually transfer funds from equity to debt and vice versa.
  5. It can act as a tool to achieve some of the financial goals. For example, the person who is expecting a retirement can transfer his equity investments to debt by securing money and taking advantage of equity.

There are certain conditions and procedure for starting STP and it also differs for transfers from equity to debt and from debt to equity.

Example of STP:

To understand the concept better let’s take a look at an example.

Mr. A is having lump sum amount of Rs. 72,000 which he invests through STP from fund X to fund Y for a period of one year. He plans on investing Rs. 6000 per month. Every month Rs. 6000 will be transferred to fund Y from fund X. With every transfer value of fund X will decrease while fund Y will increase with addition of gains or loss over the year.

Following figure can represent the above example, where pyramid for Fund X shows systematic decrease in value over the period of 12 months with each transfer and Fund Y pyramid value increases with each transfer.


How to make the most out of STP –

Here are some points which may help you make STP more beneficial:

  1. If you have lump sum money lying idle in your saving account invest in a debt or liquid fund and make STP in a good equity fund. It’s always better than keeping it in bank account as it earning some profit.
  2. It is more preferred to do STP from debt fund to equity fund when market is volatile or near peak and investment is for long term goal.
  3. STP from equity to debt is more effective when your aim is to reduce risk slowly with accumulation of wealth. Invested amount in equity will remain safe with steady returns on debt fund.
  4. STP is like SIP and needs systematic way to complete for better returns. Breaking STP due to short term market fluctuations can root loss.
  5. Avoid doing STP in new schemes. Choose the schemes with proven track record.
  6. STP in ELSS is great idea. Invest lump sum in a good debt fund and make STP in ELSS. Please do consult your advisor because ELSS comes with lock-in period and this applies to your each transfer.
  7. STP is also good for rebalancing your portfolio. Combination of equity and debt can minimize your losses and risks.
  8. Under STP when funds are transferred from one fund to another, each transfer is considered as fresh investment or as selling old and buying new scheme. Therefore it also comes with applicable tax and entry/exit loads.

Systematic Transfer Plan is the best strategy available after SIP if used suitably. It is one of the best risk managing strategy which works as a safe cushion against market risks.

Happy Investing!!!

See you later.


  • Economic Times
  • Money Control
  • Jagoinvestor


Nomination: Don’t miss it!

Recently, I heard an incident about a woman who unfortunately lost her husband in an accident. No one can understand the pain but the woman. Fortunately, the woman was well financially educated and had enough information about her husband’s investments, which made her comfortable deal with the situation but there was one roadblock – “Nomination”. Her husband regrettably missed her name to nominate in some of his major investments, which caused problem in transferring the investments on her name. Eventually, the issue was sorted out by ending up in lot of legal headache and stressful situation.

Every time we fill the application for Mutual Fund / Investments, we come across a nomination column but we miss it many a times. If an investor is investing his hard earned money to secure his / family’s future then he should be responsible for filling the nomination as well, which will ease the transfer process when he is not around.

So, what is Nomination?

Nomination is the process of appointing a person who usually can be a family member or trustworthy friend, for rightfully transfer of ownership of assets/investments. Nominating a person does not implies full transfer of ownership but the nominee will be only a custodian of your investments. Nominee is not a legal heir but nominee will legally get ownership when his name is included in asset holders WILL. In other words, when you are assigning someone as a nominee then he/she is mere custodian and legal beneficiary of investment and not the owner unless otherwise specified in your WILL.

Now since you know what it is. Let’s see how to do it.

Procedure for Nomination

Nomination Procedure is simple. While filling up an application form for any new investment e.g. Mutual funds, Insurance, Bank accounts or Demat account, fill up all required “Nomination Details” in nominee section.

If you forgot to enter nomination details in your earlier investments, Insurance, Bank account or Demat account you can always update it at later stage.  Just check it out with the company’s front desk office.

Nominee should be a major like spouse, parent or a trustworthy friend. Married couples generally assign spouse name as nominee and / or their child’s name. If nominee is a minor then investor need to provide Guardian’s details. An Investor can change the name of nominee anytime.

Why Nomination is needed?

Nomination in investments is in interest of an investor as in the event of his/her death, transfer of investments will be hassle free and nominee could liquidate investments in a needy situation. After the death of an asset holder, the transfer of investments or assets cannot be transferred directly until the legal claim process is done. The assigned nominee has to inform the concerned investment company or bank about the death of an asset holder and then need to submit all required mandatory forms to initiate the transfer.

Every investments has its own procedure for transfer as per the regulation. In case of company bonds and shares, nominee would be the beneficiary as per companies act. But all other investments/assets like real estate, mutual funds, bank accounts, name of the nominee must match with the name of beneficiary/beneficiaries in the WILL.

Nomination is a very small step which helps to safeguard the future of your near and dear ones. Skipping this important step can become a major challenge for your family when you are not around. If you are preparing the WILL you should include the same name(s) of nominee(s) as beneficiaries to avoid conflict. It will ensure hassle free transfer of investments and assets.

So, take a step back and pull all your old investments and make sure your nomination is up to date. See you next time.


  1. Economic Times
  2. Money Control