Folio Number

A Folio Number is a uniquely identifiable number that is connected to an investment, a piece of land, or an accounting entry. In the world of finance, mainly, it is the number issued to investors to represent the shares they hold in a mutual fund scheme. Assigning this code helps facilitate better storage and maintenance of investment records of respective investors.

These numbers are an integral part of investors mutual fund statements. Similar to a bank account statement, it shows transactions made on that particular account. It aids in managing investments with asset management companies, provided they use the same number every time they invest. This code, when assigned to an investor or a property, helps settle disputes and avoid confusion at a later stage.

A folio number has a different nature when used in different contexts, but the purpose is the same everywhere. It plays a vital role as a unique number allotted to investors, property holders, or bookkeeping entries so that they get easily identified when required.  

While in the field of mutual fund investments, it helps identify mutual funds associated with investors' accounts, in the real estate sector, this code helps identify the piece of land belonging to owners along with related details. Similarly, in accounting, each folio number denotes a particular entry in a ledger or journal, which can be retrieved for further analysis by company stakeholders. 

A folio number in a mutual fund is allotted by an asset management company (AMC), which tracks the investments made, their contact details, and the history of transactions in their account. It ensures that the investors receive the money they are entitled to. A mutual fund is a pool of investments made by different investors. Hence, conducting a search for folio numbers, in this case, allows respective mutual funds to be identified along with all relevant details associated with that account.

Folio numbers of property allow the pieces of land to be identified. These codes, when used, provide all details regarding the land property and can be used by bank creditors, lawyers, and investors for financial purposes, including the application of collateralized loans or investments made in properties. The rules may change from one US state to another. 

The folio number in a mutual fund can be checked using one of the following ways: 

• Individuals investing with asset management companies receive a consolidated account statement (CAS). The number can be found by looking at the investor's most recent CAS. 
• Individuals who invest through systematic investment plans (SIPs) or make payments in lump sums in any mutual fund scheme receive a confirmation statement for the investment made. This statement contains the number and can be checked from there. 
• Investors can log in to their investment accounts on AMC's website to retrieve the number.  
• Alternatively, they can also contact the asset management company to get the number. Most AMCs have a toll-free number that customers can use to connect with them for quick and easy query handling. This can be done through calls or emails, especially in cases where the investor lost previous records. 

Let us consider the scenarios below to understand how such codes help with full folio number details: 

Example #1

Suppose Dan is an investor who seeks to invest for the long term to fulfill his financial goals. He understands that meticulous planning is needed to achieve this, for which he required checking where his expenses went the most and wanted to cut down on either equity or debt funds. He uses the folio number allotted to his account to check the transaction history and past performance. On finding the related details, he noticed that the equity funds performed better. Hence, Dan decided to keep them. 

Example #2

Let us take the example of Digital Inc., the company that wants to transfer the shares of its major shareholder to a different category of funds. The transfer will happen over a series of dates. The data representation of the transfer will look similar to the following:

Digital Inc.

List of shareholders whose shares will be transferred

The folio number in mutual funds has multiple advantages, which are given as follows: 

• They help track investments. Naturally, this makes it easier to check the investment records.
• It serves as proof of the investor's identity by recording their contact and other necessary details.
• Investor information can help related parties, such as regulators and government agencies, uncover suspected fraud cases. The number can be used to perform an audit on the transactions and accounts involved to reveal suspicious activities through the transfers.
• It helps investors access the investment statement for a given period. They can also help identify duplicate entries through this.
• It also aids investors in keeping track of their holdings and keeping tabs on mutual fund returns from each AMC.
• The folio number's main benefit is that it aids in financial planning. The numbers can be used to review each transaction to see the expenses, asset returns, performance, units purchased or sold, etc. They thereby help in planning investments and returns appropriately.