Mutual Fund Nomination: Rules, Eligibility, Benefits, And How To Add A Nominee

In summary

Mutual fund nomination helps identify the person or persons who can receive mutual fund assets through the transmission process after an investor's death.

• You can nominate up to 3 people.
• Single holders must provide nomination or opt out.
• Nomination is optional for jointly held folios.
• You can add, change, or cancel a nomination any number of times.
• Nomination can be submitted online or offline.

• A nominee does not automatically determine succession rights.

  
  

For example, if Riya has a mutual fund folio in her sole name, she can nominate up to three people and specify their respective shares. She can also change the nomination later if her circumstances change.

Mutual fund nomination is a facility that allows you to name one or more persons who can receive your mutual fund assets through the applicable transmission process after your death. The transfer of mutual fund units after the death of an investor is known as transmission of units.

If you are new to investing, you can first understand what is a mutual fund and how mutual funds work.

A nomination helps the mutual fund intermediary identify the person or persons nominated by the investor. It does not, by itself, settle all questions relating to succession or ownership.

SEBI's modified nomination framework dated 29 May 2026 applies from its implementation date. For single-holder mutual fund folios opened under the new framework, nomination is mandatory unless the investor submits the prescribed opt-out declaration. Nomination remains optional for jointly held folios.

The key rules include:

• You can nominate up to 3 people.
• You can provide or change a nomination online or offline.
• You can change or cancel your nomination any number of times.
• All joint holders must consent to providing or changing a nomination.
• You can specify the percentage share for each nominee.
• If shares are not specified, the applicable rules provide for equal allocation among the nominees.
• A minor can be nominated, subject to the applicable guardian details.

SEBI's current framework replaces the older nomination provisions, so references to the previous 30 June 2024 deadline and freezing of folios for non-compliance should not be used as the current rule.

You can nominate up to 3 people for a mutual fund folio. If you nominate multiple people, you can specify the percentage share for each nominee. The nomination form provides for the allocation to be stated in whole-number percentages.

For example, Riya could nominate three people with shares of 50%, 30%, and 20%. If she does not specify the shares, the applicable rules provide for equal allocation.

You can also change the nomination later. The current SEBI framework permits investors to provide or change nominations without limiting the number of such changes.

Individuals holding mutual fund units can make a nomination, whether the folio is held singly or jointly. For a jointly held folio, all joint holders must consent to providing or changing the nomination.

A nominee can be an individual, including a minor. Where a minor is nominated, the applicable guardian details can be provided.

The nomination framework also permits certain entities and persons, such as government bodies, local authorities, persons designated by virtue of their office, and religious or charitable trusts, subject to the applicable rules.

You can provide a nomination when opening your mutual fund folio or add one later using the prescribed nomination process. SEBI allows nomination to be submitted online or offline.

A typical process is:

1. Check whether your folio already has a nomination.
2. Open the nomination facility or obtain the prescribed form.
3. Enter the nominee's required details.
4. Specify each nominee's percentage share, if applicable.
5. Complete the required authentication or signatures.
6. Submit the nomination and retain the acknowledgement.

You can also explore how to invest mutual funds if you are new to mutual fund investing.

The Bajaj Broking website provides access to mutual fund investments and related investment services.

Benefits

Nomination can make the transmission process more straightforward because the nominated person or persons are identified in advance. It can also reduce the documentation and procedural difficulties that may arise when there is no nomination.

For instance, if Riya nominates her mother for her Rs. 6 lakh mutual fund holding, the nomination gives the mutual fund intermediary a recorded nominee to process the transmission with, subject to the applicable requirements.

Limitations

A nomination does not automatically determine who ultimately owns the assets under succession law. It should therefore not be treated as a substitute for a will or broader estate planning.

You should also review your nomination when your personal circumstances change.

If you do not nominate and do not use the applicable opt-out process, the transmission of your mutual fund assets after death may require additional documents from your legal heirs. This can make the process more complicated and may result in delays. The current SEBI opt-out declaration specifically acknowledges these implications.

This is why it is important to keep your nomination details accurate and accessible to your family.

Nominee does not automatically mean owner

A nominee is not necessarily the final legal beneficiary of the assets. Nomination and succession are separate concepts, so you should consider your nomination alongside your will and other estate-planning arrangements.

Nomination and a will are different

A nomination records whom you have nominated for the applicable transmission process. A will sets out how your estate should be distributed according to applicable succession law.

Joint holding does not automatically mean nomination

Having joint holders does not mean that a separate nomination exists. Nomination is a separate facility, and the applicable rules for jointly held folios should be followed.

Review your nomination periodically and update it when your circumstances change.

Before submitting or changing your nomination, check:

• The nominee's name and details.
• The percentage share assigned to each nominee.
• Guardian details where a minor is nominated.
• Whether the nomination reflects your current wishes.
• Whether your nomination is consistent with your wider estate-planning arrangements.

Mutual fund nomination helps record the person or persons you want involved in the transmission of your investments after your death. You can nominate up to 3 people and change your nomination when needed. Keep the details accurate and review them alongside your wider estate-planning arrangements.

Last reviewed: September 2026

Mutual funds are subject to market risk. Please read the scheme-related documents carefully before investing.