Mutual Funds: When looking to park their money, mutual funds are probably one of the top options that pop up the minds of investors, be it a first timer or experienced investor. A mutual fund is basically a pool of money managed by a professional Fund Manager.
It is a trust that collects money from a number of investors who share a common investment objective and invests the money in equities, bonds, money market instruments and/or other securities. Mutual funds can be an ideal investment tool for investors who either do not have huge sums for investment, or for those who neither have the inclination nor the time to research the market, yet want to grow their wealth.
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The money collected in mutual funds is invested by professional fund managers in line with the scheme’s stated objective. In return, the fund house charges a small fee which is deducted from the investment. Not just adults, but the money can be parked in mutual funds on behalf of minors as well. It is always good to start early!
In case you are a parent or a guarding looking to open a mutual fund account on behalf of a minor, keep the following points in mind:
– Minor shall be the sole holder in an account. There shall not be any joint accounts with the minor, either as the first holder or as joint holder.
– Guardian in the folio on behalf of the minor should either be a natural guardian (i.e. father or mother) or a court appointed legal guardian.
– Documents needed to open a minor’s mutual account:
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- An attested photocopy of the following duly attested by a Notary Public or a Judicial Magistrate First Class (JMFC) or a Gazetted Officer
- Birth certificate of the minor, or
- School leaving certificate / 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.
– Standing instructions like SIP, SWP, STP in respect of a minor’s folio shall be registered / executed only till prior to the date of the minor attaining majority.
