Investors often ask whether single holding or joint holding is better in mutual funds. For mutual fund holding, investors can choose either single or joint account. In a single account, investment is made in the name of only one person, while in a joint account, investment is made in the name of two people. In a joint account, any holder is allowed to operate the account and even after the death of one holder, the other holder can easily operate the account.
What are the advantages and disadvantages of having a joint account?
A big advantage of a joint holding account is that the investment remains safe, because if something untoward happens to one holder, the other holder can operate the account. In a joint account, both investors take decisions together, which helps in taking better decisions. Recently, SEBI has given relaxation regarding nominee in joint mutual fund account, so you can keep a nominee or not.
However, there are some problems with joint accounts. There can be legal disputes and transaction-related issues. In a situation like divorce, ownership can be a hassle. Therefore, many experts recommend choosing the survivor option in a joint account. In a single account, the nominee has to provide the necessary documents to continue the mutual fund folio after the death of the holder.
A single account with a nominee is considered better because the nominee gets both access and money after the death of the holder. Having just one holder makes the process of buying and selling investments quick and simple and the investor also has complete control over all investment-related decisions. Therefore, make a wise decision while choosing a holder or nominee for mutual fund investments.
