Your guide on unclaimed dividends

Posted by Infiny Solution on March 17th, 2022

Dividends are a share in the profits that have been made by a company or a firm and distributed to each of its shareholders. The Board of Directors of a firm or company makes the announcement of the quantity or quantum of the dividend. This could be done quarterly or half-yearly. And sometimes it could be at the end of the financial year. Dividends are paid out on are decided date. In this blog, we will learn more about Unclaimed Dividends.

What are unclaimed dividends?

When as investors, we do not claim our dividends or fail to encash the dividend cheque within the stipulated time, the dividend becomes invalid. As a result, the dividend amount goes to the unclaimed stage. This unclaimed can happen due to several reasons. It might be we have changed our address, incorrect address name mismatch in AMC-Asset Management Company and bank account, not depositing the cheque on time and others. 

In short unclaimed dividends happen when we do not claim the dividend amount as an investor. When the dividends have not been claimed, the firm returns the warrants. These dividends are later disbursed to the shareholder on proper claims.

What happens to Unclaimed dividends?

If we fail to claim the dividends for more than seven years, the respective firms move unclaimed shares to our IEPF account. Also, as per the guidelines laid by the SEBI, the AMC-Asset Management Company might invest the unclaimed dividends that include both the dividend and redemption in the money market instrument or call money market or in some liquid scheme or some mutual fund scheme. 

As shareholders, we can always claim back our dividend with the help of an IEPF claim at any time. But the procedure is a bit lengthy, so we can always hire a professional financial advisor or a professional organization who would help us with the same.

What is the procedure to claim the unclaimed dividends?

As investors, we can submit the Unclaimed Redemption form or the Dividend Claim Form. Along with the form, we also need to provide the updated banking details so that we can get back the unclaimed dividends back. SEBI guidelines have made it mandatory for Asset Management Company-AMC to provide all the details of unclaimed dividends and investments on their respective websites. 

As an investor at any point of a given time, we can check our unclaimed amount just by putting our respective folio numbers on the website of Asset Management Company-AMC. If, in any case, we fail to remember the folio number, we can contact the website of the registrar of Karvy or CAMS. There, on their website, we can check the status of our unclaimed money just by putting in a few details like our email id, bank account details, mobile number, and PAN number.

To Conclude

At the end of this blog, we have learned what unclaimed dividends are all about. We also understood what happens if we don’t claim our dividend on the stipulated time. And, finally, how can we claim back our unclaimed dividend.