Complete Guide: Converting Physical Mutual Fund Units to Demat Account

Key Takeaways:

1. The process of converting physical mutual fund units to a demat account involves both online and offline methods, depending on the depository with which the demat account is held.

2. NSDL demat account holders can follow an online process, while both CDSL and NSDL account holders can utilize an offline conversion process.

3. Before initiating the conversion process, individuals must ensure they have received the Consolidated Account Statement (CAS) from NSDL by email and that the mode of holding and joint holders in mutual fund units in physical form are the same in the demat account.

4. ELSS mutual funds under the lock-in period, or mutual fund units pledged with any financial institution or stockbroker are not eligible for conversion.

5. The timeline for the offline conversion process typically involves verification by the stockbroker, followed by processing by RTAs and AMCs, with a total processing time of approximately 21 days.

To convert physical mutual fund units to a demat account, there are both online and offline methods available, depending on the depository with which the demat account is held. Here’s a step-by-step guide for both online and offline methods for converting physical mutual fund units to a demat account and vice versa.

Online Method (Only for NSDL demat account holders)

Step 1: Receive NSDL e-CAS

Open the NSDL e-CAS received on your email.

There is a dedicated link in the NSDL e-CAS. This link can be found on top of mutual fund details.

Step 2: Generate OTP

Click on the dedicated link in the NSDL e-CAS.

Enter PAN details and fill in the verification captcha code.

Click ‘Generate OTP’.

Step 3: Enter OTP

Enter the OTP received on the NSDL demat account registered mobile and email ID in the designated box on a new webpage.

Click ‘Submit’ once OTP is typed.

Step 4: Select Demat Account

Select the demat account where the physical to demat converted mutual fund units will reside.

Click ‘Submit’ once the demat account is selected.

Step 5: Review and Apply

A new webpage detailing every mutual fund scheme held in physical units’ mode and are eligible for conversion to demat mode will be displayed.

Click on the small box next to the scheme name and then choose to convert them to demat mode.

Click ‘Review’ once selection is finalized.

Check carefully if the selected mutual fund schemes for conversion is shown in the review step. If not, then go back and select them again.

If they are selected, click on ‘Apply for conversion’ button.

Offline Method (Applicable for both CDSL and NSDL account holders)

Step 1: Obtain MF-DRF Form

Contact your DP (Depository Participant) or stockbroker and ask for MF-DRF (Mutual Fund - Destatementised Request Form).

Fill in the form and submit it to the stockbroker along with the latest SOAs (Statement of Account) physically.

Step 2: Verification and Processing

Once the stockbroker or DP receives the MF-DRF and the SOAs, a two-level verification will happen.

The first verification is done by the stockbroker, and then the form along with the documents is sent to RTAs (Registrar and Transfer Agents) and AMCs (Asset Management Companies) for further verification and processing.

Conversion of Demat-held Mutual Fund Units to Physical Units

If an individual wants to convert the demat-held mutual fund units to physical units, then there is no online process either with NSDL or CDSL. An individual will have to submit an offline request for this.

Prerequisites

Before starting the process of converting mutual fund units from physical to demat or vice versa, there are certain things to keep in mind: 1. An individual must receive the Consolidated Account Statement (CAS) from NSDL by email.

2. The mode of holding and joint holders in mutual fund units in physical form must be the same in the demat account.

3. Individuals should ask their depository participant (DP) if the mutual fund units held by them are eligible for conversion.

Conclusion

The process of converting physical mutual fund units to a demat account involves different steps depending on whether it’s done online or offline, and the depository with which the demat account is held. It’s important to follow the specific instructions provided by the depository and ensure all necessary documents and forms are submitted for a smooth conversion process.

FAQ

Q1: Can I convert demat-held mutual fund units to physical units?

A1: Yes, individuals can convert demat-held mutual fund units to physical units by submitting an offline request through the respective RTAs servicing the mutual fund houses.

Q2: What are the prerequisites for converting mutual fund units to demat or vice versa?

A2: Before starting the process, individuals must ensure they have received the Consolidated Account Statement (CAS) from NSDL by email, and that the mode of holding and joint holders in mutual fund units in physical form are the same in the demat account. Additionally, they should check with their depository participant (DP) to confirm the eligibility of the mutual fund units for conversion.

Q3: How long does the offline conversion process take?

A3: The offline conversion process typically involves verification by the stockbroker, followed by processing by RTAs and AMCs, with a total processing time of approximately 21 days.