Dangers to physical documents

While most investments are available in demat form, there are some for which documents or certificates are issued. Protect them from damage or theft

Many financial instruments today are available in demat or digital format. For instance, when it comes to shares and mutual funds there is no need for investors to hold their units in the physical or paper form. This makes it easy to transact and also safer to hold. One need not worry about misplacing the documents or damaging them.

You can invest in shares or MFs with minimum of paperwork, but that is not the case with other instruments like Kisan Vikas Patra (KVP) (which has been recently re-launched), small savings instruments from Post Office or even bank fixed deposits. These require some amount of documentation. This means the requirement to hold physical certificates continues.

SAVE YOUR PAPERS

• Documents must be preserved during the entire tenure of the investment
• They must be presented at the time of redeeming
• Keep investment certificates in a separate folder to avoid constant handling
• Keeping certificates in a bank locker will protect them from theft, damage
• Getting duplicate copies made is time consuming
• Online storage is offered by banks, record management companies for digital files

Investors must take care of the certificates because in most cases these have to be submitted at the time of the redemption. If these are not present at the time of redemption then the money due to the investor could be held up. While it is possible to get duplicate copies of the certificates, the procedure can take time.

In addition to investment certificates, other physical certificates that to be protected include appointment letters, car registration papers, birth certificates, educational and professional certificates, bank statements, credit card receipt and statements, horoscopes, tax certificates, driving licence, loan documents, medical reports, insurance policies, passport, PAN card, voter card, property papers, utility bills, warranty cards, wills and so on.

Here is a look at some of the ways to protect your physical certificates.

Preserving certificates
In case of investment certificates, you must ensure that they are preserved for the entire duration of the investment. This is crucial it is a long-term investment that can stretch anywhere from five to 10 years. Ensure that the certificate is not exposed to extreme weather or dust.

The first thing is to put it in a folder or a file. Keep it in a separate file or folder to avoid frequent handling, as this will increase the risk of damage. So, keep your investment certificates in a folder where you do not keep other documents. Even punching the certificates to file them may cause damage. So, be careful while punching them.

Loss of certificates
If you lose certificates then you have to apply for a duplicate. Misplacing documents while travelling or shifting residence is very common.

In order to apply for a duplicate copy For this, you will need basic details such as the certificate number, the amount invested, and names of the investor/s. Only then will you be able to apply for a duplicate certificate. So, as a precaution maintain a list of these details of all your investments, which will make it easier in case you find some papers or documents missing. Ensure that the list has details such as date of issue, date of redemption, name of investor, etc.

There is a specific procedure to be followed while filing for a duplicate certificate. It includes making an affidavit about the lost certificate, giving an indemnity to the institution that has issued the certificate (bank/ fund house/Post Office), lodging a police complaint and placing an advertisement in one English and one regional language newspaper. This is essential to ensure that the lost certificate is replaced by a duplicate, only then will you be able to redeem your investment. You will also have to furnish necessary documents for Know Your Customer verification once again.

Home or locker
One can also look at looking at storing these certificate in a safe-deposit locker. This will ensure, to a large extent, that the documents are safe from damage or theft. This is required especially when it concerns some instruments that are in the nature of bearer ones like the recently launched KVP because the person who has the certificate can encash them.

Damaged in fire or floods
The documents can get damaged in a fire or a flood even if they are in a safe-deposit locker in a bank. For instance, during the 2005 floods in Mumbai, many banks' strong rooms got flooded and the contents inside the lockers were damaged. Similarly, even in case of a fire, the documents will be damaged. In such cases too, one will have to apply for duplicate certificates.

Online storage
Today, record management companies and banks offer facilities such as a virtual online locker where they electronically save the scanned copies of documents that customers wish to save. These companies will pick up your documents, scan and digitise them and store both physical and digital forms.

An account is created for each customer with a login ID and password. Customers can access the documents anytime they want, using the ID and password. If they want the physical documents, customers can ask for the documents to be 'returned' and it would be delivered to them.

The annual charges for these services range from Rs 1,200 to Rs 2,000 and you can store between 100 to 500 digital documents.

Keeping photocopies of all important documents is an easy way to ensure that you have access to details such as name, investment amount, redemption date, etc.

If you are a frequent traveller you must take extra care of documents such as passport or license. Especially if you are overseas . In such cases, too keeping photocopies of the documents is helpful.

The author is a certified financial planner