How to Obtain a CAN Number for Mutual Funds

Mutual funds in India provide a range of investment opportunities that can help individuals grow their wealth over time. To invest in mutual funds, one of the key steps is to obtain a Common Account Number (CAN) to track your investments. This guide will help you understand the benefits of a CAN number, the process of generating it, and the steps you need to follow to obtain it.

What is a CAN Number?

A Common Account Number (CAN) is a unique 13-digit number assigned to individuals and institutions who invest in mutual funds in India. It is used to maintain a consolidated record of an investor's holdings across multiple mutual fund schemes. The CAN number enables fund houses to consolidate your investments, making it easier to track your portfolio and manage your investments.

Benefits of Having a CAN Number

There are several benefits of obtaining a CAN number for your mutual fund investments:

Centralized Record Keeping: Your investments in different mutual fund schemes are consolidated under a single account, making it easier to keep track of your holdings. Ease of Transfer: When transferring your investments from one fund house to another, the CAN number simplifies the process by allowing you to maintain a single account. Reduced Transaction Costs: Many mutual fund houses offer lower transaction costs for investors with a CAN number, making it cost-effective to manage your investments. Instant Portfolio Updates: Real-time updates on your portfolio, including changes in holdings and dividends, are readily available. Enhanced Security: The CAN number is linked to your unique account details, providing an additional layer of security against identity theft.

The Process of Generating a CAN Number

The process of generating a CAN number involves several steps:

Choose a Mutual Fund Scheme: Start by selecting the mutual fund scheme you wish to invest in. This could be a diversified scheme or a specialized fund, depending on your investment goals. Submit Your Demat Account Details: If you already have a Demat account, you can use it to obtain the CAN number. Otherwise, you will need to open a Demat account with a stockbroker or a share trading platform. Provide Personal and Account Details: When you apply for a mutual fund account, you will be asked to provide your personal details, including your name, address, and contact information. You will also need to provide details of your bank account and if you have a Demat account, you will need to link it to your mutual fund account. Received a CAN: Once you have completed the application process, you will receive your CAN number via SMS or email. This number will be used to track your mutual fund investments and consolidate your portfolio.

Steps to Follow After Obtaining a CAN Number

After obtaining your CAN number, it is important to follow these steps to ensure proper record-keeping and smooth transactions:

Notify Your Fund House: Inform your mutual fund house about your CAN number to ensure that your investments are accurately recorded. Keep Record of Your CAN: It is a good practice to keep a record of all your CAN numbers to avoid any discrepancies in your investments. Regularly Review Your Portfolio: Regularly review your mutual fund portfolio to ensure that all holdings are correctly updated and that you are on track to meet your investment goals. Verify Portfolio Updates: Verify that all portfolio updates, such as dividends and mutual fund transfers, are accurately reflected in your account. Use Online Platforms for Convenience: Many mutual fund houses offer online platforms for managing your investments. Utilize these platforms to monitor your portfolio and make transactions with ease.

Conclusion

Obtaining a CAN number for mutual funds is a straightforward process that offers numerous benefits for investors in India. By following the steps outlined in this guide, you can ensure that you obtain your CAN number efficiently and manage your mutual fund investments with ease. For more information on mutual funds and investment strategies, consider consulting a financial advisor or visiting the website of a reputable mutual fund house.