Making the habit of saving since the initial stage of employment is a good thing as the saved money comes in handy during the windfall. The ongoing situation of the pandemic crisis has thought many people to understand the importance of saving and its significance. The uncertain environment has forced many individuals to look out for securing their future by investing in saving schemes in one or the other way.
Before one starts their journey for investing for a longer period like making investment in Public Provident Funds or Mutual Funds or Recurring Deposits or Sukhanya Sammriddhi Scheme or Bonds or Shares it is essential to give the required attention to the following list of things.
Mode of Operation
Most of the banks, financial institutions and even post offices also provide this facility for investors to either operate singly or jointly. So, managing the holdings is one of the important aspects of any kind of investment. At the time of opening an account, one should decide whether it will be operated singly or jointly or by the survivor for ensuring smooth operations.
Apart from this the order of holding that is the first applicant will be considered as a primary holder and the other person will be considered as a secondary holder. Any kind of communication and payments will usually be done by the primary holder and he or she will be considered as the first point of contact for that particular account.
Having a Bank Account
Almost every individual who has a job will have a bank account and having the same is mandatory to begin the journey of investment for a long duration. As a bank account helps individuals to use the account for transferring funds for investment purpose and the same account can be used to get the interest credited from certain investments.
An investor can also register his or her bank account using which they can invest in other financial products for a long period. By doing so one can avoid the need to change the bank mandate at the time of maturity of the said investment.
For Example: If an investor decided to invest in a recurring deposit (RD) for 5 years then he can give instructions to the bank to credit the RD account from his or her savings account directly for the entire tenure by giving auto-debit instructions and on maturity, the proceeds of the same will be credited back to the savings account.
If in case you happen to change your bank account all you need is to map all the required investment to the new bank account as soon as possible to avoid any discrepancies.
Most of the saving schemes will provide the nomination facility for its users and all one has to do is to use it properly. There is a general tendency amongst some of the investors as they tend to skip the part of registering a nominee at the time of investing.
It is strongly suggested to register a nominee and not to avoid it. In some cases, like insurance policies, it is mandatory to fill in the nominee details at the time of applying itself.
The nominee facility also comes in with an advantage as the investor can change the nominee later, if the need arises by making a fresh nomination registration for each of the investment. Hence the designated nominee can access the investment as per the investor's desire after their demise.
Updated Know Your Customer (KYC)
The Reserve Bank of India has introduced the norm of Know Your Customer or KYC way back in 2002 and directed all the banks, financial institutions to ensure that they are fully compliant with the norms as prescribed in the KYC before December 31, 2005. The main purpose of introducing KYC norms is to restrict money laundering activities.
Hence it is important to keep the KYC details updated with any of the financial investment. During the time of investment, one should keep the important documents such as Aadhaar Card, PAN Card, Passport (identification and address proof), Election Identification Card, Ration Card, Address Proof and other relevant documents handy to provide the same for completing the process of investment.
Once you invest it is better to keep a record of all the list of investments along with relevant details like date of investment, its maturity date, nominations, bank account, mode of operations, investment account details and so on up to date.