Mutual Funds SIP: Nowadays, there is a lot of discussion about Mutual Funds SIP among all the investment options. Most people definitely include SIP in their portfolio. The reason for this is that through SIP, a large fund can be created in the long run.
Experts believe that long term SIP gives an average return of 12 percent, which is much better than any other scheme. But at what age can SIP be started, can children below 18 years of age invest in SIP? If you also have such questions in your mind then know the answers here.
Know what are the rules for minor
There is no limit regarding age and amount of investment in SIP. The sooner you invest in this, the sooner you will be able to get better benefits. Investments for minors under 18 years of age can be made by their parents or legal guardian. But in such cases the child will be the only holder, joint holder will not be allowed.
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These documents will be needed
While investing in case of a minor, you have to provide proof of the age of the child and your relationship with the child. For this, as evidence of the date of birth of the minor and the relationship of the guardian (natural or legal guardian), the child’s birth certificate, passport or any such valid document will have to be given, which contains information about the age of the minor and his relationship with the guardian.
At the same time, it is important for the guardian to follow the regulations related to Know Your Customer. Transactions can be done directly from the child’s account, but if the transactions are to be done through the parents’ bank account, you will also have to submit a third party declaration form.
Upon turning 18
All these rules will be valid only till the child becomes a minor. Parents will have to stop SIP as soon as the child turns 18 years old. Before the minor turns 18, a notice will be sent to the unit holder at his registered correspondence address. This notice will explain the need for the minor to submit an application along with the prescribed documents for changing his investment status from ‘Minor’ to ‘Major’.
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