Subbu's Solution

Can I buy mutual fund units in my fiancé’s name and then gift it to her?

Also, I have a few units of a mutual fund can I transfer them to her name?
Buying mutual fund units in your fiancé’s name would make it a third party payment. By law, such payments are not accepted by mutual funds, except in case of payment made for a child by his parents/grandparents/related persons, or in case of payment by an employer for an employee, or by a custodian on behalf of an FII/FPI or a client.
As far as transfers are concerned, according to SEBI regulations mutual fund units are freely transferrable. However mutual funds restrict the transfer by way of a disclosure in the offer documents, by issuing account statement instead of a unit certificate. If unit certificates are obtained (by paying the required stamp duty and completing the formalities) then they can be transferred. Additionally, if your units are held in the demat form they can be freely transferred, according to demat regulations.
However I would rather suggest, instead of undergoing all the hassles involved in a transfer, that you add your fiancé as a joint holder in your account. This way she becomes a co-owner of the units. Or your fiancé can be made a nominee in your account.


Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

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