How to invest in Mutual fund in a minor child name?

How to invest in Mutual fund in a minor child name?

Minor children are allowed to invest in mutual Funds represented by parents or court appointed legal guardian. Minor shall be the Sole Holder of the folio and will be operated by the guardian. 

Documents required for making investment in minor child name

•  Birth certificate, Passport Copy or any officially valid documents for ascertaining date of birth and age of child.
•  Photograph of Child for identification.
• Proof evidencing the relationship of guardian and KYC Documents of guardian (PAN Card, Address proof and photograph).
• Payment Instrument from Minor account or guardian for effecting investment.

Steps to be followed for investing in Mutual Funds:

• Application for creating mutual folio along with self-attested copies of documents mentioned above shall be handed over to AMC.
• Guardian shall comply CKYC mandatory for investments in minor child.
• Only Offline applications are allowed for investment in minor child name.

Operation of mutual fund folio:

• Guardian can operate the mutual fund folio till the minor child turns 18. However, from the date of attaining majority, all transactions in the mutual fund account are freezed until the status of the folio is changed from minor to major.
• AMC can also register instructions like SIP, STP in a folio held by a minor. However, this instruction will be valid only till the date of the minor attaining majority. 

On attaining majority:

• Application form along with KYC documents for changing the status of the folio from minor to major is to be submitted to AMC.
• On CKYC Completion, Folio will be activated for further investments.
• SIP/STP instructions have to be registered again for the folio.

Mentotax recommends starting a SIP in your child name and watch the wealth grow as the child grows.

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