There are many times when Indian mutual fund (MF) investors fail to claim their dividends. For example, if the address of the investor changed, the cheque is not delivered. Typically, these cheques come back to the mutual fund house.
Some times investors get the cheques but they forget to encash them. According to Indian fund houses estimate that unclaimed dividend is one-tenth of the total pie; the significant problem is dividend that is not claimed or encashed on time.
usually a Cheque is valid for a six months, (From April 2012, it will be 3 month only) the investor can claim the amount during this period.
Now a days as many as investors choose to receive their dividends proceeds by ECS (Electronic Clearing System ). But if they change their bank account. No proper information to fund house the amount goes back to the fund house. Therefore, the fund house sits quiet for a period of six months.
Once the 6/3 month period expires Cheque becomes invalid. As per SEBI's (Securities and Exchange Board of India) rules, the fund house is supposed to invest this money in money-market instrument. For this, SEBI has allowed fund houses to charge up to 0.5% basis points of the unclaimed amount.
If an investor comes forth to claim his share of dividends proceeds, the fund house has to return him the amount as well as the appreciation earned during this period.
After 3 years, the amount continues to be managed, except that SEBI has allowed fund houses to utilize the gains for investor education; a separate fund in which such gains can be transferred. The fund is called investor Fund. Investors who wish to claim their dividends any time after the completion of this three-year period will get their principal plus gains earned in three years.
Some times Mutual fund companies send reminders to investors about unclaimed amounts via mail or postal letters .To avoid this type of problem, practice to claim your dividends on time. and use of the ECS facility and get dividends proceeds directly credited in bank account. Same time you change your bank account, please do intimate fund house.
Some times investors get the cheques but they forget to encash them. According to Indian fund houses estimate that unclaimed dividend is one-tenth of the total pie; the significant problem is dividend that is not claimed or encashed on time.
usually a Cheque is valid for a six months, (From April 2012, it will be 3 month only) the investor can claim the amount during this period.
Now a days as many as investors choose to receive their dividends proceeds by ECS (Electronic Clearing System ). But if they change their bank account. No proper information to fund house the amount goes back to the fund house. Therefore, the fund house sits quiet for a period of six months.
Once the 6/3 month period expires Cheque becomes invalid. As per SEBI's (Securities and Exchange Board of India) rules, the fund house is supposed to invest this money in money-market instrument. For this, SEBI has allowed fund houses to charge up to 0.5% basis points of the unclaimed amount.
If an investor comes forth to claim his share of dividends proceeds, the fund house has to return him the amount as well as the appreciation earned during this period.
After 3 years, the amount continues to be managed, except that SEBI has allowed fund houses to utilize the gains for investor education; a separate fund in which such gains can be transferred. The fund is called investor Fund. Investors who wish to claim their dividends any time after the completion of this three-year period will get their principal plus gains earned in three years.
Some times Mutual fund companies send reminders to investors about unclaimed amounts via mail or postal letters .To avoid this type of problem, practice to claim your dividends on time. and use of the ECS facility and get dividends proceeds directly credited in bank account. Same time you change your bank account, please do intimate fund house.
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