What It Means
A folio number is a unique account identifier that a fund house (AMC) or its registrar and transfer agent (RTA) assigns you the first time you invest in one of its schemes. Think of it as an account number specifically for that fund house; every future investment you make there can be linked to the same folio.
How It Works
You can hold multiple schemes from the same AMC under one folio, or choose to open a fresh folio for a new investment even at the same AMC, it's optional, not automatic. A folio is separate from a demat account: if you buy mutual fund units directly through an AMC or an app in physical (non-demat) mode, you get a folio number; if you buy through your demat account instead, the units sit there like shares do, without a distinct folio. Redemptions, SIP registrations, and any paperwork with the AMC or RTA (like CAMS or KFintech) reference your folio number, not your demat account.