How to avoid leaving monetary balances unclaimed

When you invest in a bank deposit or a mutual fund, or buy an insurance policy, it is important to maintain records of the same. This ensures that at the time of withdrawal, the money is paid out to you seamlessly, without any rejections or returns. Failing to do so might lead to having unclaimed balances. This can be avoided by following a few simple steps.

Update address
Investors should make sure that their current address is updated with the mutual fund, bank or insurance company where they have made investments. If there is a change in address or contact information, it should be communicated to the financial institution immediately.

Direct credit instruction
Most financial institutions mandate the provision of bank details when making the investment/insurance proposal, so that the redemption or payment proceeds can be credited directly to the investor’s bank account. The investor is required to keep the account information updated.

Registering on website
It is a good idea to get online access to investments by registering on the online portal of the the financial institution. This allows for easy access to investment information.

Finding out unclaimed amount details
Financial institutions are required to provide information about unclaimed amounts lying idle with them on their respective websites. This information can be accessed by entering a few simple details like PAN.

Process
Once the unclaimed amount is ascertained, the financial institution informs the investor of the steps to claim the proceeds. Investors are required to follow the procedure mentioned in order to access the funds.

Points to note
Some regulators allow a certain number of years for investors to encash un claimed proceeds, after which the amount is transferred to a consolidated fund for investor education.
Financial institutions consistently send reminders to investors who have unclaimed balances to their name.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)