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Investing in MF schemes in minor’s name

Investing in MF schemes in minor’s name The parents or legal guardians of a minor child can invest in mutual fund schemes in the name of the minor. There is no age limit or restriction on the amount that can be invested in the name of the minor. Parents or guardians can transact on behalf of the minor child.

July 02, 2017 10:51 IST | India Infoline News Service
The parents or legal guardians of a minor child can invest in mutual fund schemes in the name of the minor. There is no age limit or restriction on the amount that can be invested in the name of the minor. Parents or guardians can transact on behalf of the minor child.

You can invest in a mutual fund scheme in the name of your minor child by submitting valid documents of the child’s age and your relationship (parent/guardian) with the child. Then, if you wish to route the investments though your bank account, you need to submit your bank account number. You also need to submit the duly filled in Third Party Declaration Form along with the acknowledgement letter from the bank.
However, if you wish to route the investments through your child’s bank account, you have to furnish your child’s bank account number, along with the bank’s acknowledgement letter.

It must be remembered that when your child turns 18, the parent or guardian cannot redeem the fund without the consent of your now major son/daughter. Also, the funds will be directly credited to the bank account of the son/daughter. This might involve some paperwork and effort on your part as your now adult child’s PAN and KTC formalities have to be completed and the status of his/her bank account has to be changed from minor to major. To avoid all these hassles, you can invest in your own name and nominate the child as a nominee, or alternatively, include your name as a joint accountholder and do all the transactions yourself even after your child attains adulthood.

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