Can I invest in mutual funds in my children's name? If yes, do I need a demat account for them?
- Gaurang U
You can invest in mutual funds in your minor children's name. You do not need a demat account in their name to invest in mutual funds. You have to provide a copy of birth certificate or passport to prove the date of birth of the minor and relationship of the guardian (natural or legal guardian) with the minor while opening the folio.
However, please note that investing in your children's name do not offer you any tax advantages. Any gains arising out of the investment would be part of your taxable income until the minor becomes major. A simpler way would be to invest in your name and earmark the money for a specific purpose, say, your child's higher education.
This article was originally published on February 15, 2016.
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