It is a common question that an individual wants to invest in the Mutual Fund in the name of their kids. What are the conditions and restrictions on investing in mutual funds in the name of Kids? Let’s discuss this topic in this article as we move ahead.
Can I Invest in MF on Kid’s Name?
What are the Limitations?
- An Individual can easily invest in the mutual fund in the kid’s name in the case of a minor.
- The Kid will be the account holder wherein the parents or guardian's name will be entered as the guardian in the investment.
Can I Do SIP in the name of Kids?
- Since Parent’s or Guardian’s names will be put on the investment along with the Kid’s name, essential KYC documents of the Parent or Guardian will be required for investment in Mutual Fund.
- The Birth Certificate of the child will be needed. Also, Child’s Bank Account will be required since SIPs will be deducted from this bank account only.
Changes After Child Becomes Major (18+):
- There is no restriction on doing SIPs in the name of the Child, but the only condition is that the SIPs will stop once the child turns major i.e., 18 years.
- The SIPs can be restarted with the fresh documents of the major child.
What Should Investors Do?
- Once the child becomes a major i.e., turns 18 years a fresh KYC process will be done for the major with re-submission of the documents like PAN Card, Aadhar Card, etc.
An Individual can easily do mutual fund investment in the name of their kids with great ease but with certain conditions. One can plan to invest in the kid’s name keeping in mind their futuristic goals and needs. Follow due diligence before making any investment decisions.