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Convert your mutual funds into Demat Account


Mutual funds are often seen as complicated and even a very boring investment. It is often connected to investments of people who are advanced in their age and not particularly an investment for the technology savvy younger generation. But this is actually a myth, Mutual funds can be a really stable and solid investment for investors of all ages and can even be converted into Demat form.

 A Mutual Fund is essentially a collection of money contributed by a wide range of investors. A professional who is well versed with the world of investing is the fund manager, who is essentially  in charge of this fund. It's a sort of trust that accumulated  funds from a huge number of participants with a shared investing goal. These funds are then invested in stocks, bonds, marketable securities, and/or other assets. Units, which signify  a share of the fund's actual holdings, are owned by each investor. By determining a scheme's NAV or "Net Asset Value" the earnings/income earned from this cumulative  investment are split proportionately among the investors after subtracting certain fees.

Converting your mutual funds to Demat form

Reading all this might make you feel that mutual funds are indeed an investment for the old, but now all  of your current mutual funds may be converted to demat form, which means they can be electronically kept in a demat account, just like securities. And once you have converted your mutual funds to a Demat form, they can be sold with the help of your Demat account or through your Depository Participant's standard selling process. It may be obvious but still has to be said, to change your mutual funds into Demat form, you'll need to first open a Demat account (so if you don’t have one , you won't be able to change them). What’s more is that once you have converted your mutual funds to a demat form, you will receive a one statement for your holdings. This allows you to also compare and monitor the performance of all your holdings too. 

Now you must be wondering how to actually convert your mutual funds into Demat form, so let us take at the process for doing so. 

If you have paper units of a mutual fund scheme you may quickly convert them to Demat using your DP. You do not need to register a separate Demat account for this reason if you already have one. The following is the method for transferring mutual fund units held in written format to Demat form:

  • Your DP should provide you with a Conversion Request Form. 
  • Fill out and sign the Conversion Request Form. In the event of joint holders, the form must be signed by all of them.
  • To your DP, submit the Conversion Request Form together with the Account statement.
  • The DP would transmit the Conversion Request Form to the Asset Management Company after proper verification.


So, in conclusion mutual funds are a really stable and wise investment. Moreover, converting your mutual funds to a Demat format is one of those little but important steps toward financial simplicity. Once you've done that, it may inspire you to take even more steps toward optimizing many aspects of your financial life.


Related Articles: Mutual Funds are more than just Subject to market risks | 5 tools for Analysing your Mutual Fund Portfolio - Mutual Fund Portfolio Comparison Tool 


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