Business Finance

Investing in mutual funds in the name of a minor child

Many parents want to build a corpus for their child before he turns an adult so that it could come handy for higher education. They often channelize piggy-bank money, small amounts received as gifts on occasions like their birthday, winning a competition, performing well in a sport and so on to mutual funds.

every mutual fund house allows investment in any scheme in the name of a minor child, whose age is less than 18 years. There is no age limit or restriction on the investment amount.

The child shall be the first and the sole holder in such a folio. No joint holder will be allowed in this folio. The guardian in the folio should be either parent (i.e. father or mother) or a court-appointed legal guardian.

To do any mutual fund investment in a child’s name, one needs to submit a valid document of proof of the child’s age and your relationship with the child. Typically you can give a birth certificate, passport copy, etc evidencing the date of birth of the minor and relationship of the guardian (natural or legal guardian) with the minor. This needs to be provided while making the first investment or while opening a folio. Subsequent investments in the same folio of the same fund house, do not require t ..

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Oishik Das

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