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Link Aadhaar to Mutual Funds

The central government of India has suggested that people should link their mutual funds with Aadhaar.

As per the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rule, 2017. The Asset Management and Mutual Fund Companies will have to collect Aadhaar number of the people and verify the details with the UIDAI and link all the mutual funds with Aadhar.

One can link their aadhar with mutual funds using any of the following mentioned methods – online, offline, SMS, e-mail.

How to link Aadhaar with Mutual Fund via online?

One can link aadhaar with mutual fund account through the CAMS website. There will be separate links for individuals, HUFs and for non-individuals (other than HUFs). Follow the below-mentioned steps to link mutual funds with Aadhaar:

Step 1: Visit Aadhar linking web site of CAMS
Step 2: Select the option based on the type of investor – individual, HUF or non-individuals
Step 3: Enter your PAN card number and enter the ‘submit’ button
Step 4: Enter the aadhar number, name, date of birth, gender, mobile number.
Step 5: Proceed further and click on Generate OTP to send the OTP to your mobile number.
Step 6: Enter the OTP which you receive on your mobile number, tick the disclaimer and click on the ‘Submit’ option.
Step 7: Your request will be submitted and your mutual fund associated with PAN will automatically be linked with Aadhaar after thorough verification.

How to link Aadhar with Mutual Funds via offline?

Follow the below-mentioned steps to link aadhaar with mutual funds through offline mode:

Step 1: Duly fill in the Aadhar linking form by mentioning the details of your mutual fund along with Aadhar card number.
Step 2: Attach a self-attested copy of your aadhar card with the form.
Step 3: Submit the form to the nearest service centre of your fund manager.
Step 4: Once the linking of Aadhar with your mutual fund is done, you will receive a confirmation message on your registered mobile number.

How to link Aadhar with Mutual Funds via SMS?

Investors can link their mutual funds with Aadhaar by sending an SMS in a particular procedure as mentioned below:

Step 1: Type ADRLNK Aadhaar number Y
Step 2: Send the message via SMS to +91 9212993399
Step 3: Y in the message represents providing consent to Karvy to authenticate and seen Aadhaar number with the mutual fund
Step 4: You will be receiving a confirmation message on the successful linking of Aadhaar with a mutual fund.

How to link Aadhar with Mutual Funds via e-mail?

One has to send an e-mail to the asset management company and mention your aadhar number and PAN details respectively in the mail. The authorized personnel will link your aadhaar number with a mutual fund. However, one’s e-mail account should be linked with the mutual funds beforehand to avail this facility.

Who is required to link an Aadhar card with the mutual fund?

The Linking of mutual funds with Aadhar is not mandatory. However, if you made the Aadhar mutual fund link, you would benefit. The link must be made by the following investors -

  • Individuals who have invested in a mutual fund.
  • All co-holders of mutual funds.
  • Guardians of minors on whose behalf mutual funds have been purchased.
  • Persons holding power of attorney in the case of children's projects.
  • Authorized signatories of companies and firms that have invested in mutual funds.
  • Karta from an undivided Hindu family (HUF) if the mutual fund was purchased in the name of HUF.
  • You can get benefit by linking your Aadhar to your mutual fund programs, you are helping to prevent black money from flowing through the economy. Once linked, your investments can be traced and there is a proper paper trail for the government to report any fraudulent transactions.
  • Additionally, once your mutual fund system is linked to your Aadhar, you can use your Aadhar details to authenticate other transactions. 
  • The Aadhar and mutual funds linking process are one-time.
  • Once linked, it becomes easier for you to invest in other mutual fund plans. When you invest in other systems, the need for KYC is eliminated since you already have an existing wallet that contains all of your KYC details.
  • Thus, it is easier for you to invest any time, anywhere without the need for elaborate documentation. The linking process is also made easier online, allowing you to link your mutual fund plans with your Aadhar card in the easiest possible way.
  • So, if you are investing in mutual funds, link your investments to Aadhar. The process is simple, easy and simplifies future investments.

Benefits of Mutual Fund e-KYC

The e-KYC helps to complete the KYC process online with direct authorization of the clients. The main objective of the e-KYC is to diminish the turnaround time and paperwork involved in the process. Other benefits of mutual fund e-KYC are

  • Consent-Based System: The e-KYC is a consent-based system and applicants can decide on who can access his or her data from the database.
  • Instantaneous: Here the information is relayed on a real-time basis without having to face any hang-up issue which was common in the paper-based system.
  • Efficient Communication: In case of e-KYC, the automatic form and online operations endorse that the data is verified on a real-time basis.
  • Zero Hidden Costs: There is no hidden cost involved in the process.

Mutual Funds

A Mutual Fund is a type of financial vehicle which is made to pool the money collected from several investors to invest in an array of investment option like stocks, debentures, money market, commercial papers, certificates of deposits, fixed-income funds and so on. These funds are usually operated by the professionals who allocate the fund’s assets and produce income for the fund’s investors. The portfolio of the mutual fund is structured and maintained to meet the goals and objectives of the investors.

Mutual funds are invested in a widespread of securities and performance is calculated as the change in the total market cap of the fund derived out of the aggregating performance of the underlying securities in the market. It allows the small or individual investors to access diversified, professionally managed portfolios at a meagre price.

The risk factor is present in mutual funds, as mutual fund houses invest an individual's funds in a variety of financial instruments including debt, equities, government securities, corporate bonds and so on. Added to this, the fluctuation of the prices of these instruments owing to a lot of external factors such as interest rate changes, demand-supply factor, inflation and so on will also add up to the frequent variation in returns.

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