What is the procedure to dematerialise mutual funds?

Dematerialisation is the process of converting mutual funds that are in physical form into dematerialised form that can be held in a demat account.

The procedure to dematerialise mutual funds is as follows:

1. 2 Demat Request Form (PDF) signed in signature with DP and signature with RTA fields for each ISIN, Fund or Folio (same or different AMC).
   
2. 1 self-attested PAN card copy and self-attested mutual fund statement. (Example: To dematerialise 2 schemes, 4 demat request forms, 2 self-attested PAN copies and 2 self-attested mutual fund statements are required)
   
3. Courier the documents to:
   

Zerodha,
153/154, 4th Cross, J.P Nagar 4th Phase,
Opp. Clarence Public School,
Bengaluru - 560078

The RTA takes up to 25 days to dematerialise and credit the units to the demat account, after which they are displayed on Console ¹. When the units are credited to the demat account, an SMS and email are sent, and there will be a price discrepancy on Coin. To fix the discrepancy, the original purchase price must be entered on Console. To know how to fix the discrepancy, see Why is the buy average for some mutual funds shown as a discrepancy?

Charges for dematerialising

Dematerialising ELSS schemes:

Before dematerialising the ELSS scheme, stop or pause the SIP. If it's not stopped, then the investment will continue in physical or non-demat mode, and the investment can be tracked only via the RTA or AMC.

To dematerialise ELSS schemes, 2 Demat Request Forms along with 1 annexure (PDF) must be couriered for each mutual fund investment, ISIN, or folio. Zerodha will generate DRN for each purchase date.

If an ELSS investment is made using SIPs, dematerialisation charges will be levied for every instalment. Assume 10 monthly SIPs are made into an ELSS fund, and a dematerialisation request is placed. Charges will be applicable for each individual SIP instalment.

Transfer of ELSS will not be possible since it will be under the lock-in period.

The charges to dematerialise mutual funds are deducted from the Zerodha account balance and can be viewed on the funds statement.

Notes
¹Close-ended mutual funds that are dematerialised will not be displayed on Coin. Kite will display close ended mutual funds under holdings, provided they are listed on the secondary market. Console will display them as ISINs under holdings if they are not listed on the secondary market. These funds can also be viewed on the holding statement. To download the holding statement, see How to download transaction cum holding (SOT and SOH) statement?

To redeem an unlisted closed-ended mutual fund, a redemption requisite form (PDF) must be submitted.