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Mint
01-07-2025
- Business
- Mint
Groww's switch to demat MFs: What investors gain—and what they could lose
Groww has quietly changed how it handles mutual fund investments—and in the process, left many users confused. Starting 5 June, all new mutual fund purchases on India's largest investment platform are being processed in demat form by default, instead of the Statement of Account (SoA) format most investors are used to. Existing investments remain unchanged, but going forward, users will need to fill out an opt-out form if they want to continue in SoA mode. While Groww did notify users of the change via email, many seem to have missed it—learning about it only when their new SIPs began showing up in demat. 'You should have a basic pop-up option for investor permission before taking demat mode…Now, most will have 2 folios for each fund," one user wrote on X. The change has triggered a wave of user complaints—not necessarily because demat is worse, but because of the lack of upfront consent, and the added hassle of managing mutual funds across two formats. Some investors now find themselves holding the same scheme in two different modes, complicating portfolio tracking and transactions. Yet, demat holdings also bring their own conveniences. Here's a breakdown of what's changing, how it affects investors, and what to weigh before choosing between demat and SoA. What's changing—and why it matters Until now, mutual funds bought via Groww were held in SoA form by default. In this format, units are stored with the registrar and transfer agents (RTAs) appointed by fund houses, and investors can access them through multiple portals like MF Central, MF Utilities (MFU), or directly with asset management companies (AMCs). Under the new policy, all new MF investments—both one-time and SIPs—will be stored in demat format, with units held in the investor's demat account through a depository participant (DP) such as CDSL, and NSDL. Unless users opt out, demat is now the default. This matters because how you hold your MF units affects how you access, transfer, redeem, and even exit a platform. Demat holdings typically tie you to one broker, while SoA units can be viewed and transacted across multiple portals. Groww did not respond to Mint's queries on the rationale for the switch. Some experts speculate that since platforms earn little from direct MF plans, shifting users to demat could eventually allow them to cross-sell more lucrative offerings such as F&O or margin trading 'This shift to demat mode by the IPO-bound platform creates a stronger platform dependency for users which helps in attracting anchor and retail investors in the IPO," said Abhishek Kumar, a Sebi-registered investment advisor and founder of SahajMoney. 'As unlike the SoA mode, which allows easy transfer between platforms, demat mutual funds are tied to specific depository participants, making it more difficult for users to switch to competing platforms. This strategy increases customer retention through increasing their stickiness and reduces churn rates, particularly important in India's competitive fintech market," Kumar said. The trade-offs of demat Holding mutual funds in demat form brings a few conveniences that appeal to many investors. For one, it simplifies record-keeping: updates to contact information, nomination, or bank details need to be made only once at the demat level, and they apply across all holdings. It also offers a unified view—stocks, ETFs, and mutual funds can be tracked within a single interface, making portfolio monitoring more seamless. In the event of the investor's death, transferring units to legal heirs tends to be smoother in demat, given the centralised ownership record. And for those looking to pledge assets for loans or margin trading, demat units can be more easily collateralised. However, these advantages come with important caveats. Perhaps the most significant is that demat units typically bind the investor to the broker through which the purchase was made. So, if you want to redeem or switch your mutual fund holdings, you usually have to do so through the same platform—a level of lock-in that doesn't exist in the SoA format, where units can be transacted across multiple portals. Redemptions in demat mode also happen in units rather than rupee amounts, which can leave behind small residual balances—especially for SIP-based investors. Systematic Transfer Plans (STP) and Systematic Withdrawal Plans (SWP), commonly used for managing cash flows, are harder to implement in demat mode. Groww has enabled STPs via its own backend systems, but SWPs are not yet functional on its demat offering. Off-platform access to demat holdings is another pain point. Unlike SoA units, which can be accessed through MFU or MF Central regardless of where they were purchased, demat investors must typically log in to CDSL or NSDL portals—systems that can be clunky and, in some cases, require submission of physical forms for actions like redemptions or transfers. Finally, while Groww does not currently charge transaction fees or annual maintenance charges on demat accounts, other brokers do. And that could change in the future. What experts say 'It's crucial to platform-proof your investments in case you lose access to an account or are dissatisfied with a service," said Ravi Saraogi, a registered investment advisor and founder of Samasthiti Advisors. 'With SoA holdings, you can manage your mutual funds across platforms like MFU, MF Central, or directly with AMCs. In demat, you're largely tied to one platform." Kumar of Sahaj Money, added: 'Most of these platforms don't earn money on direct MF plans. But once you're in demat, they can push you toward margin trading, F&O, international stocks, and other products where they do earn revenue." Groww's own blog post highlights that demat mode allows users to access margin funding by pledging mutual fund units. But that comes with risks: a study by the Securities and Exchange Board of India (Sebi) found that over 93% of F&O traders end up losing money. What are other platforms doing? Brokerages like Zerodha and Upstox have long operated with demat as the default mode for mutual funds. Meanwhile, platforms like MFU, Kuvera, and Paytm Money continue to operate primarily in SoA mode. In 2022, Paytm Money shifted to demat after changing its regulatory license from RIA to broker. As of now, Groww's move appears to be platform-specific. Sebi has not issued any public guidance on whether nudging users toward demat is acceptable. The Association of Mutual Funds of India (Amfi), the mutual fund industry body, has not commented either. What should you do? Ultimately, both formats have their place. If you prefer flexibility, cross-platform access, and a direct relationship with fund houses, SoA is likely the better choice. If you value a consolidated experience and don't mind staying within one ecosystem, demat may suit you—as long as you know what you're giving up. Either way, investors need to be clearly informed of the trade-offs before such defaults are applied.
Economic Times
05-06-2025
- Business
- Economic Times
This mutual fund investment platform to shut down from June 30, 2025: What happens to your active SIPs, existing investments?
Getty Images Piggy platform closure Piggy, a popular mutual fund investment platform, will cease operations in June. The company has recently notified all its customers through emails about this matter. Several users express concerns regarding the future of their ongoing investments, SIP (Systematic Investment Plan) mandates, and access to tax and transaction records.'After much reflection, we've decided to discontinue further development and support for the Piggy app and web portal. The platform will go offline 30 days from today,' the company announced in an email on May 30, company has clarified various topics through mail to guide customers on managing their SIPs, pending redemptions, and dividend payouts. Can I transfer my SIP to other MF platforms? It's important to note that SIP mandates cannot be transferred to another platform. You need to set up new SIPs on MF Central, individual AMC websites, or any other investment platform you choose. What happens to my active Piggy SIPs, can they be transferred? All SIP mandates set up through Piggy will be automatically cancelled between June 15 and 20, 2025, according to the company's email. If you prefer to stop them earlier, you can do so manually through the Piggy app. Alternatively, you can contact your bank to cancel any standing instructions issued in the name of BSE Star or are the FAQs from the Piggy platform, which customers should note:Do I need to withdraw my money before Piggy shuts down? No. Your mutual fund units live with the fund houses and their RTAs (CAMS or KFintech). Piggy is just a viewing/transacting layer. Even after our app goes dark, you can:Log in at individual AMC/RTA portals, or their mobile a Consolidated Account Statement (CAS) from CAMS or MF Central any time you need a snapshot of all holdings. Bank holidays in June 2025: Check full list of state-wise bank holidays What happens to my active SIPs? Can they be moved? Automatic stop: Every SIP mandate set up through Piggy will be cancelled between 15 and 20 June it sooner: Open the Piggy app, tap your profile (top-left), go to upcoming events, click on 'Stop SIP.'Bank route: You can also tell your bank to cancel any standing instructions in the name of BSE Star / ICCL. Transfer? Sadly, SIP mandates cannot be ported. You'll need to start fresh SIPs on MF Central, AMC sites, or another platform of your choice. Can I buy or sell from other platforms? Absolutely. Because these are 'physical' (RTA-held) units, any service that supports importing external folios can handle them. Popular options:MF Central (industry-wide)Fund house or RTA portals/appsThird-party investment apps that let you link existing folios (check with their support teams). What about pending redemptions or dividend payouts? Redemption orders placed before Piggy shuts down will be processed normally. Dividends will keep flowing straight to your registered bank account. Piggy's closure doesn't affect AMC payouts. How do I get tax statements after Piggy is gone? Capital gains reports: MF Central and CAMS both offer period-wise capital gains statements. Is my personal data still safe? Yes. We're following standard data-retention rules and will wipe or anonymise what's no longer required by law.
Time of India
05-06-2025
- Business
- Time of India
This mutual fund investment platform to shut down from June 30, 2025: What happens to your active SIPs, existing investments?
Piggy, a popular mutual fund investment platform, will cease operations in June. The company has recently notified all its customers through emails about this matter. Several users express concerns regarding the future of their ongoing investments, SIP (Systematic Investment Plan) mandates, and access to tax and transaction records. 'After much reflection, we've decided to discontinue further development and support for the Piggy app and web portal. The platform will go offline 30 days from today,' the company announced in an email on May 30, 2025. The company has clarified various topics through mail to guide customers on managing their SIPs, pending redemptions, and dividend payouts. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo Can I transfer my SIP to other MF platforms? It's important to note that SIP mandates cannot be transferred to another platform. You need to set up new SIPs on MF Central, individual AMC websites, or any other investment platform you choose. Live Events What happens to my active Piggy SIPs , can they be transferred? All SIP mandates set up through Piggy will be automatically cancelled between June 15 and 20, 2025, according to the company's email. If you prefer to stop them earlier, you can do so manually through the Piggy app. Alternatively, you can contact your bank to cancel any standing instructions issued in the name of BSE Star or ICCL. Here are the FAQs from the Piggy platform, which customers should note: Do I need to withdraw my money before Piggy shuts down? No. Your mutual fund units live with the fund houses and their RTAs ( CAMS or KFintech). Piggy is just a viewing/transacting layer. Even after our app goes dark, you can: Log in at individual AMC/RTA portals, or their mobile apps. Request a Consolidated Account Statement (CAS) from CAMS or MF Central any time you need a snapshot of all holdings. Bank holidays in June 2025: Check full list of state-wise bank holidays What happens to my active SIPs? Can they be moved? Automatic stop: Every SIP mandate set up through Piggy will be cancelled between 15 and 20 June 2025. Stop it sooner: Open the Piggy app, tap your profile (top-left), go to upcoming events, click on 'Stop SIP.' Bank route: You can also tell your bank to cancel any standing instructions in the name of BSE Star / ICCL. Transfer? Sadly, SIP mandates cannot be ported. You'll need to start fresh SIPs on MF Central, AMC sites, or another platform of your choice. Can I buy or sell from other platforms? Absolutely. Because these are 'physical' (RTA-held) units, any service that supports importing external folios can handle them. Popular options: MF Central (industry-wide) Fund house or RTA portals/apps Third-party investment apps that let you link existing folios (check with their support teams). What about pending redemptions or dividend payouts? Redemption orders placed before Piggy shuts down will be processed normally. Dividends will keep flowing straight to your registered bank account. Piggy's closure doesn't affect AMC payouts. How do I get tax statements after Piggy is gone? Capital gains reports: MF Central and CAMS both offer period-wise capital gains statements. Is my personal data still safe? Yes. We're following standard data-retention rules and will wipe or anonymise what's no longer required by law.
Mint
29-04-2025
- Business
- Mint
MF Central by CAMS and KFintech: Consolidate, update and transfer mutual funds easily
MF Central is a unified digital platform designed to simplify mutual fund management for investors in India. It was launched in 2021 as a collaboration between CAMS and KFintech, following directions from SEBI. While updating nominee details is one of its most widely used features, it is important to recognise that MF Central offers several other services aimed at enhancing investor convenience and comfort. All these services are delivered in compliance with regulatory rules, regulations, and standards. Let us now explore three key features of MF Central beyond nominee detail updates. Several investors hold multiple portfolios across various Asset Management Companies (AMCs) such as SBI Fund Management, HDFC AMC, and ICICI Prudential AMC. This can lead to fragmentation and make it difficult to manage all portfolios efficiently. MF Central plays a crucial role in such situations. This platform allows users to consolidate these portfolios and their holdings, provided they share the same Permanent Account Number (PAN), mode of holding along with other key details. Therefore, this consolidation simplifies the tracking and management of individual portfolios. Thus making investing a pleasant experience for individual retail investors. To ensure seamless mutual fund transactions, it is essential to keep contact and bank details up to date. The MF Central platform allows investors to update their email address, residential address, phone number, and bank account details across all mutual fund holdings through a single request by submitting a simple form. This feature ensures that all communications and transactions are properly directed, significantly reducing the risk of digital fraud, scams, failed transactions, or missed updates. In unfortunate circumstances such as the demise of the investor, transferring mutual fund units to the rightful heir can be a long, drawn-out, complex process. MF Central helps immensely simplify this process by providing applicants with an online facility to transfer units. Legal heirs and all rightful owners can initiate the transfer of shares by submitting the necessary documents digitally, streamlining what was previously cumbersome. Therefore, as the Indian mutual fund ecosystem continues to grow and evolve, digital platforms such as MF Central are becoming increasingly crucial by fostering financial inclusion along with empowering investors. Beyond just updating nominee details, MF Central's key role in reducing paperwork and focusing on compliance helps save time. The platform's capabilities around folio consolidation, contact and bank detail updation, and unit transmission play an extremely important role in making investing easier in the country. Hence, irrespective of you being a new investor or a seasoned one, using MF Central can help you effectively manage your investments with clarity, greater transparency, efficiency and peace of mind. Making mutual fund investments truly digital first and investor-friendly. Further, for more details and clarifications on the platform, refer to its official website at: Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to consult their financial advisor or visit the official MF Central website for the most accurate and updated information. First Published: 29 Apr 2025, 04:41 PM IST
