SIP of Mutual Funds is considered better for investment. It is becoming very popular with time. Despite the market risk, many people are earning good profits in the long term through this. An average return of 12 percent is obtained in this. Any person can start investing in SIP with even Rs 500.
After the start of SIP, it can also be increased after some time. Also, if you are facing financial problems then investment can be stopped for some time. It is liked a lot due to better returns. But the question arises whether those who are below 18 years of age can also invest in it?
What are the rules for minor in SIP?
Market experts say that the sooner one starts investing in SIP, the better. Because it gives higher returns. But if a minor wants to invest in it, he will need his parent or guardian. However, it does not have a joint holder. The child in whose name the SIP is started is considered the holder.
What documents will be required for minor?
If SIP is started in the name of a minor, then the guardian has to provide proof of relationship with the child. For this, to prove the date of birth of the minor, birth certificate, proof of relationship with the guardian, passport or any other document which can confirm the relationship between the guardian and the minor. In case of Legal Guardian, the conditions related to Know Your Customer will have to be followed.
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Transitioning to Adulthood
When the child turns 18 years old, the first thing the parents have to do is stop the SIP. After this, notice will have to be sent to the registered address of the unit holder. Which application form needs to be submitted to change the status from Minor to Major.
