Investing in a mutual fund for your child? Remember These Guidelines

Investing On Behalf Of Children Using Mutual Funds? Remember These Guidelines

April 2023: For individuals who don’t have a lot of money to invest or who don’t have the time or want to undertake market research but still want to increase their wealth, mutual funds can be an excellent tool.

Professional fund managers invest the funds raised in accordance with the scheme’s declared investment goal.

Mutual Funds: Whether a first-time or seasoned investor, mutual funds are likely one of the first possibilities that come to mind when considering where to park their money. A mutual fund is essentially a collection of funds that is overseen by a qualified fund manager.

A trust manages the money and invests it in securities such as stocks, bonds, money market instruments, and/or other investments after collecting funds from a group of participants who have similar investing goals.

For individuals who don’t have a lot of money to invest or who don’t have the time or want to undertake market research but still want to increase their wealth, mutual funds can be an excellent tool.

Professional fund managers invest the money raised in mutual funds in accordance with the scheme’s declared goals.

The fund house requests a tiny fee in exchange, which is subtracted from the investment. Money can be held in mutual funds on behalf of kids as well as adults. Starting early is always a good idea!

The following considerations should be kept in mind if you are a parent or guardian seeking to open a mutual fund account on behalf of a minor:

A minor must be the only account holder. There cannot be any joint accounts, either as the first holder or as a joint holder, with the minor.

• The guardian listed in the folio on behalf of the minor must be either the minor’s natural guardian (such as their father or mother) or the guardian designated by a court.
• Paperwork required to open a minor’s joint account:
  Birth certificate of the minor, School leaving certificate or mark sheet issued by Higher Secondary Board of respective states, ICSE, CBSE, etc., or Passport of the minor, or Any other suitable proof evidencing the date of birth of the minor, duly attested by a Notary Public, Judicial Magistrate First Class (JMFC), or a Gazetted Officer. Standing instructions such as SIP, SWP, and STP regarding a minor’s folio may only be registered or carried out up until the date the minor reaches majority.

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