Mutual Funds SIP: Can minors invest in mutual funds through SIP? Know rules here

Mutual Funds SIP: Every parent wants to make some investment in their child's name to secure their future. The investment can be for their marriage, studies, health, or any other purpose. Since a minor, who is below 18 years of age, cannot make their own financial decisions, their parents can invest in a mutual fund in the minor's name itself.

Mutual Funds SIP: How to invest in a mutual fund under a minor's name?

To open an account under a minor's name, you need some documents as per AMFI's (Association of Mutual Funds in India) requirement. These documents include the minor's school-leaving certificate or mark sheet, birth certificate, and relationship document.
 
If a natural guardian invests, they must provide paperwork proving the relationship with the minor, and if a court-assigned legal guardian invests, a copy of the court order that designated the legal guardian must be supplied.
 
A guardian must also submit documentation such as a PAN, bank account information, and full KYC data. The minor will retain exclusive ownership of the investment, but the guardian will make all payments from their bank account.

Meanwhile, the minor's account shall not be joint, and any nominee cannot be added to that account.
 
Minors can also invest in Indian stocks, but again, their guardians will operate their DEMAT accounts and bank accounts. However, a minor cannot trade in the equity intraday, equity derivative trading, or currency derivative trading segments. They can only invest in equity delivery trades.

Mutual Funds SIP: What happens when your child turns 18?

Until the child turns 18, only parents can operate the minor's account. Once the minor is 18 years old, they need to fill the minor-to-major (MAM) form and submit it with other requirements. Minor's PAN and KYC details are also needed to be submitted. The account holder will continue to receive dividend payments.
 
You cannot conduct any money transactions until this procedure is finished. However, the payments will be deposited into the unitholder's bank account or reinvested in the portfolio, as applicable.