WHAT IS FOLIO NUMBER ?
With the increasing understanding of financial planning, the folio number has become one of the most known words of late as the investments in equity-linked and equity instruments have increased manifold. Mutual funds need some system and mechanism to store data with respect to investments and transactions made by investors. This information is also used to determine the fees applicable to the investor and the fund they are entitled to.
There are a huge number of investors who may have similar first or last names and it is technically not feasible to use their names as a unique ID and this is why a numeric ID is allocated. Hence, a folio number, identical to a bank account number, is a unique number provided to investors when they make investments. The AMC uses this to check the holdings under the name of the person to whom the folio is linked.
This unique number is mandatory to be provided by the AMC or fund houses and varies from fund house to fund house. While starting the investment in mutual funds, the fund house asks for all the required details and then these are mapped together to form a unique folio number that is allotted to the investor.
UNDERSTANDING THE RELEVANCE OF FOLIO NUMBER
Folio number is an integral and significant part of investors’ mutual fund statements. Just like how a bank account statement reflects every transaction you do on a particular account with every detail, similarly, a mutual fund statement reflects information by reflecting your investment trail in that fund. Thus, you must make sure that this number is the same every time you go forward with investing your money. This will make it very convenient for you to manage and keep a track of your investments with the fund house. Most often, an email consisting of a soft copy is sent within 2-3 days after investing, and a hard copy in 7 to 10 days.
WHERE TO LOCATE THE FOLIO NUMBER ?
Following are some effective ways through which you can retrieve your folio number:
Consolidated Account Statement (CAS)
As the name suggests, CAS reflects money holding in a scheme. It reflects the plans and schemes in which an investor is invested in, purchase price, the amount invested, and the units thereon. Additional information in CAS includes bank details, folio number, contact and mailing details, nominee details among others. This statement is issued on a monthly basis.
Mutual Fund Statement:
When investors invest in a mutual fund plan from the AMC or the fund house, they receive a set of documents via SMS and email. Folio number can be spotted in this statement and is very similar to that of the bank account statement. The format of this statement varies across fund houses but the basic information and components remain the same. Keeping the record of the folio number is important as it is the reference of the investments made. It is a great practice to ensure that the folio number is the same across all the investments as multiple folio numbers will make it difficult and cumbersome for you to track investments.
Folio numbers can also be found in the SMS or email that you receive from the fund house or AMC while starting your investment or getting updates.
CAN YOU HAVE MULTIPLE FOLIOS ?
The answer to this is a yes. You can have multiple folio numbers which can benefit you from the operational aspect of investing in mutual funds. For example, investors choosing to invest through multiple folio numbers under the same AMC have some benefits. If they have gained in one while a loss in another, they have the flexibility to opt and choose which investment to sell first as per their tax efficiency.
Nevertheless, if investments are in one folio - the first in-first out phenomenon is used from the taxation aspect. For equity investment, which is generally a long-term commitment, it is advised by the financial professionals and advisor to use a single folio. Also, mutual funds provide the facility of consolidating all the folio in a single master folio for administrative convenience.
ADVANTAGES OF FOLIO NUMBER
It is the most efficient, quickest, and simplest way to check the track record of investors.
Details and Information:
It helps investors or any concerned person to find out the transaction history of investments and the contact information.
It helps to facilitate transact anytime and anywhere without any hassles of remembering and noting the different account numbers.
It helps investors to save a lot of time on re-doing the KYC process while transacting with the same AMC.
It helps in the foolproof verification of the account holder and also helps to avail the investment statement for any period.
It helps investors to track the investment amount in different mutual fund plans and availing the list of allocated units by the fund house.
FAQs - About Mutual Fund Folio Number
Q. What is the folio number ?
Folio number is a unique number provided to investors when they make investments. The AMC uses this to check the holdings under the name of the person to whom the folio is linked.
Q. What is the relevance of the folio number ?
Folio number is an integral and significant part of investors’ mutual fund statements as it reflects information by reflecting your investment trail in that fund.
3. Where can we find our folio number ?
You can find your folio number in the mutual fund statement, consolidated account statement, or the Email/SMS sent by the AMC.
4. What are the key benefits of folio number ?
Some of the key benefits of the folio number are that it saves time, is feasible, provides details and information, and hassle-free transaction.
5. Can you have multiple folio numbers ?
Yes, you can have multiple folio numbers and this has its own merits and demerits.
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