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ilable with mutual fund investments, but all of them might not be useful for an individual investor. Investor needs to check the exact details of the benefits that are actually offered, and then cherry-pick those suitable for their needs.

One such feature that has been present for some time is the debit-cum-ATM card offered by the mutual funds for instant access to the amounts present in the mutual fund scheme. Here is a close look at all the details of this type of cards and how they can be useful.

Nature:

The number of units that are held by the investor in a particular scheme represents the amount of investment in a mutual fund. This can be used by the investor for their specific needs. However, the restriction is that converting the units to actual cash can take some amount of time.

For example, in a situation, where, the investor has the funds lying in the mutual fund income fund but wants to use it, and hence, gives a redemption request. It will take a few days for the amount to be credited to the bank account, and only when this is done, would the figure be used for further expenses.

If the fund issues a cheque to be deposited into the investors’ account, then, the process can be a bit longer. A card issued by the mutual fund can tackle the situation and ensure that the individual can use the amount immediately and instantly without having to wait for the entire redemption process to be completed.

Debit-cum-ATM card:

The real benefit for the investor actually arises when the card issued by the mutual fund is a debit-cum-ATM card. In this there is a tie up between the mutual fund and a bank that is issuing the card, so that, there can be multiple usage of the card like cash withdrawal from the ATMs across the country. At the same time, the card can also be a debit card, which helps in making the transaction easy by just swiping the card.

Linkages:

There are different facilities that are provided in terms of the linkages that the card will have with the investment account of the investor. However, it is important that the basics are not forgotten in the entire effort. There is likely to be a linkage with a base account, which in most cases will be a liquid account or a money market account. This is done to ensure that there is access to the money that cannot suddenly be wiped out by some negative market movement.

There are other facilities like a balance inquiry option that need to be checked while taking the card. At the same time, there will also be some limit that will be fixed for the liquidity amount for other funds that are linked to the card, say, 50 or 60 per cent for equity and balanced funds.

Another point that needs attention is limit for daily usage of the card. Once these are considered in the workings, then the card can be used effectively.