Post demonetisation, piggy bank money accumulated by kids as gifts are finding its way to their respective bank accounts.
Parents should use this money fruitfully and invest it in mutual funds in the name of the minor child. They can start with amounts as little as Rs 500.
Is an MF investment possible in the name of a minor child?
The minor 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 or a court-appointed legal guardian.
Documents required to make an investment?
Minor investments are identified by the date of birth of the investor, and so, while making an investment, you have to provide the child's date of birth and age. In addition to this, you will have to give a copy of the age proof, which can be a birth certificate, passport copy, etc. evidencing 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.
Can I even start a SIP or STP in the name of a minor child?
Yes, a mutual fund will also register instructions by an investor like SIP, STP in a folio held by a minor. However, this instruction will be valid only until the date of the minor attaining majority, even though the instructions may be for a period beyond that date.