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Eligibility and requirements
A minor SIP account can be opened by a parent or a court-appointed legal guardian.
The minor must be below 18 years of age at the time of folio creation.
Only the guardian can operate the folio on behalf of the minor.
Documents required
- Guardian’s PAN: Mandatory for folio creation.
- Relationship Proof: Birth certificate, passport, or a court order.
- Minor’s PAN: Not mandatory for folio creation.
- Bank account details: Either the minor’s or guardian’s bank account can be used for transactions.
Radhika Gupta, CEO of Edelweiss AMC, recently clarified that while a minor’s PAN is not required to create a folio, the guardian’s PAN is mandatory.
She also emphasised that redemptions are processed only to the minor’s bank account, ensuring financial security.
How to start a SIP for a minor
- Choose a mutual fund and select the SIP amount.
- Fill out the minor folio application form with the guardian’s details.
- Submit the required documents.
- Link a bank account for SIP transactions.
- Once the application is verified, the SIP can start.
Transactions and redemptions
SIP contributions can be made from both the guardian’s and minor’s bank accounts.
Redemption proceeds are credited only to the minor’s bank account.
The folio must be updated when the minor turns 18. A new KYC process is required to transfer ownership.
Processing time
- A minor folio takes up to 2 business days for verification.
- The first SIP transaction can be initiated during folio creation or after approval.
Key points to remember
- Only the guardian can operate the SIP until the minor turns 18.
- The minor’s bank account should be operational for smooth transactions.
- One should ensure all details are updated when the minor becomes an adult.