What Is Unclaimed Dividend?
An unclaimed dividend is a dividend that remains unpaid or unclaimed by shareholders after a company declares and attempts to distribute it. Common reasons for unclaimed dividends include outdated contact information, forgotten investments, or dormant accounts.
Duration and Transfer to IEPF:
Companies must maintain unclaimed dividends in a separate “Unpaid Dividend Account” for seven years. If not claimed within this period, the amount, along with any accrued interest, is transferred to the Investor Education and Protection Fund (IEPF) established by the government. Once transferred, claiming the funds becomes more complex but is still possible through the IEPF.
How To Check Unclaimed Dividends?
- Company Websites: Visit the investor section, where companies list unclaimed dividends, including shareholder details and dividend amounts. You can also check how the dividends are distributed, such as Growth vs. IDCW options.
- IEPF Website: It maintains a comprehensive database of all unclaimed dividends transferred to the fund.
- Registrar and Transfer Agents: Contact the company’s registrar directly for information on unclaimed dividends.
Unclaimed Dividend Treatment:
- Unpaid Dividend Account: Companies must transfer unpaid dividends to this special account within seven days of declaration. The account is maintained separately and earns interest. This interest can be similar to the returns from Dividend Yield Funds.
- Website Disclosure: Companies must list unclaimed dividends on their websites, along with shareholder names and last known addresses.
- Transfer to IEPF: After seven years, the unclaimed amount and any earned interest are transferred to the IEPF, relieving the company of liability but allowing shareholders to claim from the IEPF.
How To Claim Unclaimed Dividends?
Within Seven Years:
- Contact the company or its registrar with:
- Proof of identity
- Shareholding details
- Updated bank information
- Complete necessary forms and provide documentation.
After Transfer to IEPF:
- File an online application using the IEPF-5 form.
- Submit physical documents for verification to IEPF authorities.
- The process can take several weeks to months, depending on verification and claim complexity.
Tips for Preventing Unclaimed Dividends:
- Regularly monitor investments and update contact details, including those for Value Mutual Funds.
- Check company and IEPF websites periodically to ensure no dividends are missed.
This structured approach helps investors manage unclaimed dividends effectively while staying compliant with regulatory requirements.
Disclaimer:
The views in this article are personal and intended for educational purposes only. They are not meant to provide product recommendations or financial advice. Please consult with a financial expert before making any investment decisions.
