Mutual funds have become a popular investment choice due to the various features of Systematic Investment Plans (SIPs) and their promising returns. With market-linked benefits and an average return of around 12%, SIPs offer flexibility, allowing investors to start with as little as Rs 500 and adjust their investment amounts over time. But what if someone under 18 wants to invest in SIPs? Here are the rules and guidelines for minors investing in SIPs.
Rules for Minors Investing in SIPs
There is no age limit for investing in SIPs, and the amount of investment is also flexible. However, for individuals under 18 years of age, investments must be made by their parents or legal guardians. In such cases, the minor will be the sole holder of the investment account; joint holders are not permitted.
Required Documents for Minor Investments
To invest on behalf of a minor, the guardian must provide proof of the child’s age and their relationship with the child. Acceptable documents include the child’s birth certificate, passport, or any valid document containing information about the minor’s age and their relationship with the guardian. Additionally, the guardian must comply with Know Your Customer (KYC) regulations. Transactions can be conducted directly from the child’s account, but if using the parent’s bank account, a third-party declaration form must be submitted.
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