Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Can I Add a Joint Holder to My Mutual Fund and PMS Without Redeeming?

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 23, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Ravinder Question by Ravinder on Jul 19, 2024Hindi
Listen
Money

Sir My question is " I invested in a mutual fund as well as in PMS in signal name. Now my question is can I add another person as a joint holder with out redeeming the fund? If yes what is the procedure? Thanks Kapoor

Ans: Most mutual fund houses / PMS providers do not allow adding a new holder to an existing folio. This is due to the regulations which consider it as a transfer of investment. However, there are exceptions.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Money
Hello Sir, Myself and my husband as joint holder are in the process of investing in below mentioned mutal funds with following amount thru one of our broker..Pls guide us whether we can go ahead with the following..? Also we need to further invest 40 lacs in mutual funds thru state bank of india and union bank of india...pls let me kow whether we can invest in multple mutual funds thru banks as mentioned..Thanks a lot 1.SBI Magnum Ultra short duration fund 4lacs 2.Franklin India Equity Savings Fund 4lacs 3.HDFC Mutual Fund 12 lacs 4.Bandhan Mutual Fund 8lacs 5.ICICI prudential Equity Savings Fund 4lacs 6.Nippon India Equity Savings Fund 8lacs
Ans: Your plan to diversify across mutual funds with your husband is commendable. Here’s a breakdown of each fund type and the broader aspects you may want to consider in your investment approach. You’re taking a structured approach by involving a broker, which can help streamline your investments. Let’s evaluate your current choices to ensure they meet your financial goals effectively.

 

1. Ultra-Short Duration Funds for Liquidity
An ultra-short duration fund is often chosen for its low-risk profile and high liquidity.

 

Pros: These funds are relatively stable and can offer better returns than traditional savings accounts, which is advantageous for short-term goals or emergency funds.

Cons: Returns may be lower compared to equity-oriented funds, especially over the long term. Additionally, they are subject to market interest rate fluctuations, which could impact returns in certain scenarios.

 

Recommendation: Ensure this fund aligns with your immediate cash needs or short-term goals. If your intention is a longer-term investment, consider moving part of this allocation to balanced funds for improved growth potential.

 

2. Equity Savings Funds for Balanced Growth and Stability
Equity savings funds provide a balance of growth potential and stability by blending equity and debt.

 

Pros: These funds typically suit conservative investors who seek equity exposure with reduced risk. They offer moderate growth potential and stability.

Cons: Returns may be limited if equity markets underperform. Over long durations, the growth might not match that of pure equity funds, given the debt component.

 

Recommendation: Allocate to equity savings funds if your goal is medium-term growth. For long-term objectives, equity mutual funds with more aggressive growth might be worth exploring.

 

3. Broadly Diversified Mutual Funds for Long-Term Goals
Investing a significant amount in broadly diversified funds, as seen with your choices in HDFC and Bandhan, can be beneficial for long-term wealth creation.

 

Pros: Equity funds in diversified categories are designed to provide substantial long-term growth. They are well-suited to help you build a corpus for future goals, such as retirement or wealth accumulation.

Cons: These funds are more volatile in the short term. If markets face downturns, the value of investments might fluctuate. Patience is crucial with these types of funds to realise their potential.

 

Recommendation: With a horizon of at least 7-10 years, these funds can form a core part of your long-term portfolio. However, regularly review performance with your Certified Financial Planner (CFP) to make sure they align with your financial objectives.

 

4. Importance of Diversifying Across Fund Houses
You plan to invest an additional Rs 40 lakh through multiple banks. Diversifying across different fund houses (like SBI, Union Bank) can help mitigate fund house-specific risks.

 

Advantages: Different fund houses may follow unique strategies or approaches. Diversifying allows you to take advantage of various styles and strategies, helping balance performance and reduce risk.

Limitations: Holding too many funds across multiple banks might lead to unnecessary overlap. This could result in redundancy and may dilute returns. Over-diversification can also make it challenging to track performance effectively.

 

Recommendation: Avoid having too many similar funds within the same asset class. You might want to consult your CFP to identify any overlaps and adjust to maintain a balanced portfolio without excessive redundancy.

 

5. Active Funds vs. Index Funds
Although your query doesn’t mention index funds, many investors often consider them. However, index funds may not always outperform actively managed funds, particularly in the Indian market.

 

Limitations of Index Funds: Index funds strictly follow the index, so they might underperform during volatile market phases. In contrast, well-managed actively managed funds have the flexibility to adapt and potentially outperform.

Benefits of Actively Managed Funds: These funds can offer higher returns as professional managers actively adjust the portfolio to align with market conditions and trends.

 

Recommendation: Actively managed funds, particularly with reputable fund houses, often provide better opportunities for wealth creation. Investing through a qualified mutual fund distributor with CFP credentials can ensure that you have the right actively managed funds aligned with your risk appetite and goals.

 

6. Importance of Portfolio Review and Rebalancing
Once you’ve made these investments, periodic review is essential.

 

Why Review is Necessary: Over time, fund performance, market conditions, and your financial goals might change. A regular review helps keep your investments aligned with these dynamics.

Rebalancing Strategy: Aim to rebalance annually to ensure that your portfolio doesn’t become overly skewed towards one type of asset. This can also be an opportunity to shift funds based on changing goals or tax considerations.

 

Recommendation: Work with your broker and CFP to schedule an annual review. This ensures your investments stay on track and adjustments are made as needed.

 

7. Tax Implications on Mutual Funds
When investing through mutual funds, tax implications play a significant role in overall returns. Here’s a quick overview to consider:

 

Equity Fund Taxation: For equity mutual funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%.

Debt Fund Taxation: For ultra-short and equity savings funds, LTCG and STCG will be taxed as per your income tax slab. This is essential to plan for and reduce the tax impact.

 

Recommendation: Keep tax-efficiency in mind, especially if you’re investing substantial amounts. Discuss with your CFP how to plan for capital gains taxes effectively to optimise returns over the long term.

 

Final Insights
Your structured approach and decision to work with a broker are excellent for goal-based investing. Diversifying across equity and debt funds will help balance growth with stability. Investing additional funds through banks like SBI and Union Bank can be beneficial if monitored carefully to avoid fund overlaps. Actively managed funds will also offer flexibility in fluctuating markets.

By focusing on regular portfolio reviews, optimising for tax efficiency, and ensuring a balanced portfolio across asset classes, you’ll be on a solid path toward your financial goals.

 

Best Regards,
 
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Listen
Money
Dear Sir, I am 47 years old IT professional. My current salary is 1.5 lakhs per month. I have a daughter who just completed her 10th board exam. My corpus is around 1.6Cr FD&PPF; 30 lakhs in MF & stocks; 50 lakhs in EPF. I have no debt and living in my own house. Please suggest if I can plan for retirement
Ans: Your financial position is strong, and planning for retirement at 47 is a smart decision. Below is a detailed 360-degree approach to assess whether you can retire comfortably and how to ensure financial security.

Understanding Your Current Financial Position
Income: Rs 1.5 lakh per month.

Corpus:

Rs 1.6 crore in Fixed Deposits (FD) and Public Provident Fund (PPF).

Rs 30 lakh in mutual funds and stocks.

Rs 50 lakh in Employees' Provident Fund (EPF).

Liabilities: No debts.

Assets: Own house, ensuring no rent or EMI burden.

Family Responsibility:

Daughter has just completed the 10th board exam.

Higher education expenses need to be planned.

Key Considerations Before Retirement
Expected Retirement Age

If you plan to retire early (before 55), corpus sustainability needs careful assessment.

If you work till 60, it will provide a larger financial cushion.

Post-Retirement Expenses

Living expenses, healthcare, travel, and lifestyle costs must be considered.

Inflation will increase future expenses.

Daughter’s Education

Higher education costs are significant.

Corpus should cover both education and retirement without compromise.

Medical Expenses

Health costs increase with age.

A high health insurance cover is essential.

Wealth Growth vs. Safety

A mix of equity and debt investments ensures growth while preserving capital.

Excessive reliance on FDs and PPF may limit long-term wealth accumulation.

Assessing If You Can Retire Comfortably
Current Corpus Size

Rs 2.4 crore (excluding house) is a strong starting point.

But, inflation will reduce its real value over time.

Expected Corpus Growth

Investments in mutual funds and stocks should continue to grow.

PPF and EPF offer stable but lower returns.

Withdrawals Post-Retirement

Sustainable withdrawals should not deplete the corpus too soon.

A balanced investment strategy is required.

Gaps in Planning

Heavy reliance on FDs and PPF may not be ideal.

More equity exposure can ensure inflation-beating returns.

Steps to Strengthen Your Retirement Plan
1. Optimising Investment Strategy
Continue investing in mutual funds with a mix of large-cap, mid-cap, and flexi-cap funds.

Reduce dependence on FDs for long-term needs.

Equity mutual funds help counter inflation and grow wealth.

Avoid index funds as they provide average returns without active management.

Regular funds through a Certified Financial Planner (CFP) offer expert monitoring.

Diversify investments between equity, debt, and fixed-income products.

2. Planning for Daughter’s Education
Higher education costs can be Rs 30-50 lakh in the next 5-7 years.

Separate this goal from your retirement plan.

Increase equity investment to build an education corpus.

Avoid withdrawing from retirement savings for education.

3. Building a Healthcare Safety Net
Health insurance should cover at least Rs 30-50 lakh.

Consider super top-up plans for additional coverage.

Maintain an emergency medical fund to cover non-insured expenses.

Review insurance policies periodically.

4. Creating a Sustainable Withdrawal Plan
Avoid withdrawing a large portion of the corpus in early retirement years.

Keep at least 5 years of expenses in liquid assets.

Equity exposure should reduce gradually as retirement progresses.

Use dividends and interest income before selling assets.

Final Insights
Retirement is possible, but adjustments are needed for long-term security.

Continue investing aggressively for the next few years.

Ensure daughter's education is planned separately.

Review investments and insurance regularly.

Keep flexibility in withdrawal strategy post-retirement.

A structured plan will ensure a financially secure and comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Asked by Anonymous - Apr 03, 2025Hindi
Listen
Money
My employer offers a salary sacrifice scheme for pension contributions, but I don't fully understand how it works. What are the potential advantages and disadvantages of joining such a scheme, and how does it affect my take-home pay and long-term financial planning?
Ans: A salary sacrifice scheme for pension contributions allows you to give up a portion of your salary in exchange for increased employer contributions to your pension. It has tax and National Insurance (NI) advantages but also some potential drawbacks.

How Salary Sacrifice for Pension Works
You agree to reduce your gross salary by a chosen amount.

Your employer contributes this amount directly to your pension.

Since your taxable salary is lower, you pay less income tax and NI.

Your employer also saves on NI and may pass on some or all of this saving to your pension.

Advantages
1. Tax and NI Savings
You don’t pay income tax or NI on the sacrificed amount.

Your employer saves on NI (currently 13.8%) and may increase your pension with these savings.

2. Higher Pension Contributions
Since more money goes into your pension, your retirement corpus grows faster.

Compounding over time enhances long-term wealth.

3. Increased Take-Home Pay
Although you sacrifice part of your salary, the NI savings may offset some of the reduction.

Depending on employer policies, your net pay may not drop significantly.

4. Potential Employer Matching
Some employers pass their NI savings into your pension, increasing your total contributions.

Disadvantages
1. Reduced Gross Salary
A lower salary means reduced future pay rises if they are percentage-based.

Life cover, sick pay, and redundancy pay linked to salary may be affected.

2. Lower Borrowing Capacity
Mortgage applications consider salary; a lower reported income might reduce borrowing potential.

3. Impact on State Benefits
If salary drops below certain thresholds, statutory benefits like maternity pay and state pension could be affected.

4. Restricted Access to Pension
The extra pension savings cannot be accessed before retirement (except under specific conditions).

Effect on Take-Home Pay
Your net pay will be slightly lower, but less than the actual amount sacrificed.

The tax and NI savings cushion the impact.

If your employer adds their NI savings, your total retirement savings increase.

Effect on Long-Term Financial Planning
Your pension fund grows faster, improving retirement security.

Short-term disposable income is slightly reduced, so budget planning is important.

Consider how the reduced salary affects other financial goals like buying a house or saving for education.

Should You Opt for It?
If employer NI savings are passed to your pension, it’s highly beneficial.

If you are close to lower tax bands or state benefit thresholds, assess the impact.

If you plan to apply for a mortgage, check how it affects your eligibility.

A Certified Financial Planner (CFP) can help assess your personal situation before making a decision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8182 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 03, 2025

Asked by Anonymous - Apr 03, 2025Hindi
Listen
Money
Hi Sir , Greetings of the day!! hope you are doing well !! I want to do a savings of 50 lacs in as much less time span as possible because I want to buy a property in Gurgaon. My monthly salary is 1 lac 11k and I am currently investing 10k in mutual fund monthly and 50k in nps yearly. Can you please guide me how can I save 50 lacs and in how much time ?
Ans: Your goal of saving Rs 50 lakh for a property in Gurgaon is ambitious but achievable with the right strategy. Below is a structured approach to help you reach your target in the shortest possible time.

Understanding Your Current Financial Position
Your monthly salary is Rs 1.11 lakh.

You invest Rs 10,000 per month in mutual funds.

Your annual NPS contribution is Rs 50,000.

You haven't mentioned any liabilities or existing savings. If you have any ongoing EMIs or debts, they should be factored in.

Key Considerations for Achieving Rs 50 Lakh Target
The speed of reaching Rs 50 lakh depends on savings rate and returns.

High savings rate is the most reliable way to accumulate wealth.

Investment returns are uncertain and depend on market conditions.

A balanced approach is necessary to ensure stability and growth.

Increasing Your Savings Rate
Currently, you are investing Rs 10,000 per month.

If you can increase it to Rs 50,000 per month, you will reach Rs 50 lakh faster.

Cutting discretionary expenses will free up more money for investments.

Consider reducing unnecessary spending on dining out, luxury items, and vacations.

Redirect bonuses, incentives, or salary hikes towards savings.

Choosing the Right Investment Instruments
Mutual Funds for Growth
Actively managed equity mutual funds can generate better returns than fixed deposits.

A mix of large-cap, mid-cap, and small-cap funds can balance risk and reward.

Mid-cap and small-cap funds have higher growth potential but also higher volatility.

Avoid index funds as they provide average returns and lack active risk management.

Debt Investments for Stability
Fixed deposits, debt mutual funds, and PPF provide stability.

These should be used for short-term parking rather than long-term growth.

Debt mutual funds are taxed based on your income tax slab.

Avoid locking too much money in low-return instruments.

Balancing Risk and Return
Investing entirely in equity mutual funds can generate high returns but comes with volatility.

A mix of 80% equity and 20% debt can provide stability.

As your target nears, shift more funds towards safer instruments.

Avoid speculation and high-risk investments like cryptocurrency.

Role of NPS in Your Goal
NPS is good for retirement but not ideal for short-term goals.

Partial withdrawal is allowed only under specific conditions.

Do not rely on NPS for your property purchase.

Managing Tax Efficiency
Equity mutual fund LTCG above Rs 1.25 lakh is taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

Debt mutual fund gains are taxed as per your income slab.

Investing in tax-efficient instruments will maximize returns.

Estimating the Timeframe
If you invest Rs 50,000 per month, you can accumulate Rs 50 lakh in about 7-8 years with moderate returns.

If you invest Rs 75,000 per month, you can reach Rs 50 lakh in about 5 years.

The faster you increase your savings, the sooner you will achieve your goal.

Final Insights
Increase your monthly investment to at least Rs 50,000.

Focus on actively managed equity mutual funds.

Keep a small portion in debt for stability.

Avoid unnecessary expenses and invest salary increments.

Do not depend on NPS for this goal.

Monitor and adjust your portfolio as needed.

Stay disciplined and patient to achieve your target.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Dr Dipankar

Dr Dipankar Dutta  |1092 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Apr 03, 2025

Dr Dipankar

Dr Dipankar Dutta  |1092 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Apr 03, 2025

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x