How to Transfer Mutual Funds from One Broker to Another

Thinking about switching your mutual fund investments to another broker? Whether you’re looking for better returns, lower fees, or simply a more user-friendly platform, knowing how to transfer mutual funds can save you time and potential headaches. While the process is relatively straightforward, timing it right and understanding the steps involved can make a big difference in how smooth your transition will be. If you're considering a switch, it's important to align your portfolio with a platform that makes investing simpler without forcing you to exit your existing schemes. Transfer to Bajaj Finserv Without Changing Your Scheme

In this article, we’ll walk you through every step—right from choosing a new broker to ensuring your investments land safely in your new account. We’ll also explain how transfers work across demat accounts, bank withdrawals, and even in the unfortunate event of the account holder’s death.

Let’s start by clearing up a common question.

Can mutual funds be transferred?

Yes, mutual funds can be transferred—but the process varies depending on how the funds are held and why you’re transferring them. For example, if your mutual funds are in dematerialised (demat) form, the transfer can happen electronically between demat accounts. But if they are in physical or non-demat form, you’ll need to fill out specific forms and follow your Asset Management Company’s (AMC) instructions.

Transfers can also happen due to inheritance, gifting, or shifting between personal brokerage accounts. However, not all mutual fund schemes allow transfers—so it’s important to check with the AMC beforehand.

Also, if the transfer is treated like a sale (for instance, if you redeem and reinvest), there might be capital gains tax involved. In contrast, gifting units to a family member usually doesn’t attract tax immediately, but taxes can apply if they sell those units later.

So yes, you can transfer mutual funds—but the "how" depends on your account type and reason for transfer. Understanding the legal and procedural angles of mutual fund transfers is just one part—having a single dashboard to track all your holdings makes the process far more efficient. Bring Your Existing Funds Under One Dashboard

How to efficiently transfer mutual funds to another brokerage?

Before jumping into the transfer process, ask yourself why you want to shift your mutual fund holdings. Are you unhappy with your current broker’s service? Want to rebalance your portfolio with new fund options? Or simply switching to a lower-cost or more feature-rich platform?

Once your reason is clear, here’s a step-by-step breakdown to help you make the transfer as smooth as possible:

1. Research and choose a new broker
   Start by comparing brokers on factors like fees, fund access, customer service, and digital tools. Pick one that aligns with your long-term investing goals and offers a reliable platform.
2. Open an account with the new broker
   Once you’ve decided, open an account. You’ll need to complete their application, submit KYC documents, and verify your details. Be extra careful here—incorrect details can delay the entire transfer.
3. Review and update your investment strategy
   This is the perfect moment to rethink your goals and risk appetite. Are your current funds still serving your needs? Should you explore new asset classes or fund types with the new broker? Consider this a chance to fine-tune your portfolio.
4. Initiate the transfer process
   Inform your current broker that you want to transfer your holdings. You’ll likely need to fill out a transfer request form—available online or offline. Clearly specify which mutual funds you want to move.
5. Complete the transfer paperwork
   You’ll need to give your new broker all necessary details like your old account number, fund names, and authorisation documents. Double-check everything before submission to avoid delays.

Monitor the transfer progress

Once you've submitted all the forms and notified both brokers, the ball is in their court—but that doesn't mean your role is over. Keep an eye on the process. Some brokers offer online tracking, while others may need a quick follow-up via call or email.

It’s a good idea to stay in touch with both your old and new broker to ensure the transfer doesn't get delayed or stuck due to missing information. Knowing the estimated transfer timeline can help you set expectations—most transfers take a few working days, but this can vary depending on the broker and the type of fund.

Your vigilance now will pay off later by ensuring everything gets transferred smoothly and without errors.

Confirm the transfer completion

Once the transfer is complete, you should receive a confirmation from your new broker. This could be via SMS, email, or directly through the app or website.

Don’t stop there. Log in to your new account and check whether:

• All the mutual funds you selected have been received
• The units and fund names match your original holdings
• No units or schemes are missing

Also, compare these holdings with your previous account statement. If there’s a mismatch, contact both brokers immediately so they can resolve it while the transfer is still fresh in their systems.

A quick verification now can save you a lot of trouble later—especially when you sit down to track returns or file taxes.

Review and update your investment portfolio

Now that everything has been moved over, take this opportunity to do a full portfolio health check. Ask yourself:

• Are your holdings aligned with your current financial goals?
• Do you need to rebalance based on your new risk appetite?
• Are there better-performing funds now available through your new broker?

If needed, explore additional mutual fund options, start a Systematic Investment Plan (SIP), or rebalance towards a mix of equity and debt. Your new broker might offer tools like portfolio tracking, SIP calculator, or even fund recommendations—so make use of these features.

Also, update your KYC details, bank account info, and nominee details if they’ve changed. This ensures future transactions and redemptions go smoothly.

How to transfer mutual funds from one demat to another?

If your mutual funds are held in a demat account, transferring them to another demat account is a bit different from switching brokers. But don’t worry—it’s manageable if you follow the right steps.

Here’s how to go about it:

1. Check compatibility:
   First, ensure both demat accounts (old and new) belong to the same depository—either NSDL or CDSL. Transfers across different depositories are not permitted.
2. Fill a Delivery Instruction Slip (DIS):
   You’ll need to get a DIS from your current demat provider. This form includes details like the ISIN of the mutual fund, target demat account number, and transfer type.
3. Select transfer type:
   For personal transfers (non-trading purposes), choose the off-market transfer option. Also, mention the reason—like account consolidation.
4. Authorise and submit:
   Sign and submit the DIS to your current provider. Make sure your signature matches what's on record to avoid rejection.
5. Pay applicable charges:
   There might be a small fee for the transfer—usually between Rs. 25 to Rs. 100 depending on your broker.
6. Track and confirm:
   After submission, monitor your new account for confirmation. Once the units appear in the new demat, verify that all the details are accurate.

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Steps for the transfer of mutual funds in case of death

In the unfortunate event of the investor’s death, mutual fund units can still be transferred to a nominee or legal heir. However, this process is more document-heavy and may vary depending on whether a nominee was registered.

Here’s a breakdown:

1. Inform the AMC or registrar:
   The first step is to notify the Asset Management Company (AMC) or registrar (like CAMS or KFintech) about the account holder’s demise.
2. Submit death certificate:
   Provide an original or notarised copy of the death certificate.
3. If a nominee is registered:
   The nominee must fill out a claim form and provide their KYC, bank account proof, and identity documents like Aadhaar or PAN.
4. If there’s no nominee:
   The legal heir(s) will need to submit a succession certificate, probate of the will, or a legal heir certificate, along with an indemnity bond.
5. AMC verifies and processes the request:
   Once verified, the AMC will transfer the units to the nominee’s or legal heir’s account.
6. Update new account holder’s KYC:
   The new unit holder should ensure that KYC details and contact information are updated to avoid communication issues in the future.

How to transfer mutual fund amount to bank account?

If you're not transferring between accounts but simply want to redeem your mutual fund units and receive the money in your bank account, the process is pretty straightforward.

Here’s how it works:

Log in to your account:
Whether it’s through the AMC’s website, a registrar like CAMS/KFintech, or your broker’s app, go to your mutual fund holdings and select the option to redeem.

1. Enter the redemption amount or units:
   Choose how much you want to withdraw—either in rupee terms or number of units.
2. Verify bank account details:
   Ensure that your bank details on record are correct. The redemption amount will be credited to this account.
3. Submit and wait for settlement:
   Once submitted, the amount typically gets credited in 1–3 working days, depending on the type of fund. Liquid funds are usually faster.
4. Confirm credit:
   Check your bank account to ensure the amount has been received. If there’s any delay, contact the AMC or intermediary platform.

Redemptions might be needed from time to time, but managing them becomes easier when your entire portfolio is linked and visible from one intuitive platform. This ensures no delays or errors during fund settlement. Transfer, Track & Optimise via Bajaj Finserv

What will be the mutual funds transfer fees and taxes?

Before making the transfer, it's smart to understand the potential costs involved—both in terms of charges and taxes. While fees are usually minimal, tax rules vary depending on how the transfer is handled.

Here's what to keep in mind:

• Transfer fees:
  For demat-based transfers, most brokers charge a nominal fee—usually between Rs. 25 to Rs. 100 per transaction. If you're transferring physical units, some AMCs may charge processing fees.
• Tax implications:
  If you redeem your  to switch to another broker, it’s treated as a sale and capital gains tax applies.
  • Short-term capital gains (STCG): Taxed as per your income slab (for equity funds: 15%).
  • Long-term capital gains (LTCG): Equity LTCG above Rs. 1 lakh is taxed at 10% (without indexation). For debt funds, LTCG is taxed as per slab post-Budget 2023.
• Gifting mutual funds:
  If units are gifted to a relative, there’s usually no immediate tax, but the receiver will be taxed on capital gains when they redeem later.

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What are the documents for the transfer of mutual funds?

No matter which transfer route you take—demat, inheritance, or gifting you’ll need some paperwork to get things moving. The exact documents depend on the reason and type of transfer.

Here’s a quick list based on scenarios:

• Demat to demat transfers:
  • Delivery Instruction Slip (DIS)
  • Target demat account details
  • PAN and client ID details
• In case of death of the account holder:
  • Death certificate (original or notarised)
  • Claim form (by nominee or legal heir)
  • KYC and bank details of nominee/heir
  • Succession certificate or will (if no nominee)
  • Indemnity bond (if required)
• Gifting to someone else:
  • Gift deed (optional but recommended)
  • PAN, KYC, and bank details of both parties
  • AMC transfer form or request letter

When should you consider the mutual fund transfer?

Transferring mutual funds isn’t something you need to do often, but there are specific situations where it can make a lot of sense. If any of the following apply to you, it might be time to consider making a switch.

• Dissatisfaction with your current broker:
  If your broker’s customer service, platform interface, or support has been frustrating, it may be worth moving to one with better service and tools.
• Lower brokerage or better features elsewhere:
  Some platforms offer lower transaction charges, free goal tracking, or more intuitive apps. If your current broker feels outdated or costly, consider a transfer.
• Change in investment goals or strategy:
  You might have started investing with one objective but now need to realign your portfolio. A new broker may offer products that suit your updated financial plan better.
• Consolidation for easier tracking:
  If you’re managing investments across multiple brokers, consolidating them into one account can simplify portfolio reviews, tax filing, and performance tracking.

Considerations before transferring mutual funds

While transferring mutual funds can be straightforward, overlooking key details might cause delays or even result in failed transfers. Here's a checklist of things to consider beforehand:

• Check transfer eligibility:
  Not all mutual fund schemes permit transfers—especially if they are closed-ended or have specific restrictions. Verify this first with your broker or AMC.
• Transfer type and account compatibility:
  Ensure your new broker supports the same depository (NSDL or CDSL) as your old one for demat transfers. Otherwise, extra steps may be involved.
• Exit loads and lock-ins:
  Some mutual funds have lock-in periods or may charge exit loads if withdrawn early. Even though you're not redeeming, switching may still trigger costs depending on the method.
• Capital gains and taxation:
  If the transfer involves redemption, capital gains tax could apply. Understand the tax treatment before initiating.
• Nominee updates:
  If you haven’t updated your nominee information, now’s a good time—especially if your life circumstances have changed (e.g., marriage, children).
• Document readiness:
  Having all necessary forms, KYC documents, and DIS slips ready can speed up the process and prevent back-and-forth.

By considering these points, you reduce the risk of errors and ensure your mutual fund transfer process runs smoothly.

Conclusion

Transferring mutual funds to a new broker doesn’t have to be complicated—but it does require planning. Whether you're doing it to lower fees, gain access to better tools, or streamline your investments, the process becomes much easier when you understand each step and have your documents ready.

Remember:

• Always reassess your investment goals before switching.
• Keep your documents, KYC, and bank details updated.
• Understand any fees or taxes that may apply.

From deciding to move, choosing a new broker, ensuring tax compliance, to finally reviewing your updated portfolio each step in your transfer journey needs clarity and ease. Choose a platform that gives you visibility, flexibility, and control over your investments. Transfer, Track & Optimise via Bajaj Finserv

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