There are so many important numbers already in our life: Aadhaar number, PAN number, bank account number, etc. If we say mutual fund folio number, you are bound to ask: what is this new number? Let us explain.
What is a folio number?
The concept of a folio number has been borrowed from accountancy, where book-keeping records are referenced through folio numbers. A mutual fund folio number is a unique identification number which is like your customer ID number with a bank. This number is assigned by the asset management company to you when you purchase mutual funds from them. This number acts as an identifier of the investor concerned.
Asset management companies ask you for bank account details and KYC documents for processing your application for mutual funds. The folio number is kept blank at this stage. Once the application is processed and you make your first mutual fund purchase, a folio number is given to you. You can now use this number to track your investments and how they are performing.
The tracking of investments helps the investor and the fund management company in deciding the fees to be charged, the decisions that need to be taken on selling etc. Usually, it takes around 3 working days for a folio number to be generated. You also don’t need to repeat the KYC process with the asset management company every time you make a new purchase, if you have a folio number.
Can one have multiple folio numbers?
Generally, each investor has a single folio number allotted to them by the asset management company to help keep track of all investments. But it is not mandatory that a person can have only one folio number. Sometimes investors prefer one folio number for a particular mutual fund scheme and a different folio number for a different scheme with the same asset management company. Usually, though, investors prefer a single folio number, so that they can track all their activity in the asset management company.
However, multiple folio numbers provide one advantage, when it comes to selling of the mutual funds. If you have one loss making folio and one profit making folio, then you can sell the units in the loss making folio to maximise your gain. However, if you have invested all in the same folio number, then while selling, you will have to follow the first-In, first-out principle, irrespective of whether it was your oldest fund that was loss-making or not. Despite this, most people prefer a single folio number for the ease it provides.
If you are investing in a different scheme with a different asset management company, then you are assigned a different folio number.
Recovering your folio number
But what if your company did not communicate the folio number to you separately or you forgot to note it down? How then, will you be able to know your folio number? Well, there are a few ways to find out.
- You can check your mutual fund statement. This is the email/physical copy given to you when you made your first investment.
- Check your consolidated account statement. This is like a bank statement sent periodically to the investor by the asset management company.
- Check the app or the website of the asset management company that you use. It will give you the folio number along with the e-statement.
- If you invested through a broker, contact him/her to get your folio number.
It is advisable to save your folio number, so you can keep track of all your investments and make sound investment decisions.