Facts about mutual funds for minors - Fusion - WeRIndia

Facts about mutual funds for minors

Facts about mutual funds for minors

Mutual funds are good investments to meet the needs of children’s education.

However, if you want to open a mutual fund account in the name of your minor children, then you have to keep certain things in your mind.

You need to submit KYC documents to open a mutual fund account for your minor child. These documents can be birth certificate, passport, school leaving certificate and court order (in case the guardian is appointed by the court especially if the parents are divorced).

These are important to know the age of minor and his/her relationship with the guardian. PAN of the guardian is also essential. Canceled cheque of minor’s or guardian’s account is essential for the payments to be made from that account.


The application for the mutual fund account is to be filled and signed by the guardian.

Joint account holding and nomination is not allowed for a mutual fund portfolio.

A minor is the only holder of the mutual fund portfolio but it will be operated by his/her mother or father or a guardian appointed by the court until he/she attains 18 years.

The payments are limited to ₹50,000 and will be treated as third-party payment.

Guardian can be changed in the event of death of the existing guardian by submitting necessary KYC documents. In other cases, NOC from the existing guardian has to be submitted to change a guardian.

After the minor attains 18 years, all the account transactions are suspended till the status of the portfolio is changed.

All the existing standing instructions will continue, but the guardian is no longer allowed to make any fresh financial or non-financial transactions after the minor turns 18.

KYC of the account details such as PAN, bank account number and contact details in addition to the canceled cheque from the new bank account are essential.

The mutual fund account holder’s signature has to be attested by the bank manager and included in the records.

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