Invested in MFs for a minor? Process to follow for investments when a child becomes an adult
Parents often invest for their children, either in their own names or in the name of the minor child. When the minor turns 18 years old, he or she can operate the account only after completion of certain paperwork. Here is the process to be followed for mutual fund investments in this regard.Obtain PAN
The minor who has turned major needs to apply for PAN or else update existing PAN records with their photo and signature. Application can be made using any of these portals: Protean (formerly NSDL eGov) ( https://tin.tin.nsdl.com/pan/index.html) or portal of UTITSL (https://www.pan.utiitsl.com/PAN/).
Open or update bank account
The applicant needs to open a new bank account as a major or update the existing one from minor to major status. Once this is done, the bank can issue a cheque book with the applicant’s name imprinted on the cheque.
KYC process
Next, the applicant needs to complete the mutual fund KYC process by fi lling out the KYC form and submitting identity and address proof documents as required.
Submit change of status form
Next, the applicant can fill up the minor attaining majority (MAM) form and submit it along with the following documents:
Copy of PANCopy of KYC acknowledgementA cancelled cheque leaf with the applicant’s name printed on itNomination formSignature attestation by banker in the prescribed format.
Points to note
Even while the child is a minor, the ownership of the units vests in the minor, and the guardian can carry out transactions on behalf of the minor.All standing instructions such as SIP and STP stop automatically when the minor turns major.Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
