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Investing in a mutual fund in the name of a minor

Ashutosh Gupta talks about the points that one should consider while investing in mutual funds in the name of a minor

What is the maximum amount that can be invested in a mutual fund in the name of a minor per financial year?
- CS Ram

There is no upper limit and you can invest as much as you want but there are some considerations that you should keep in mind while investing in the name of a minor.

Firstly, you cannot invest in a joint name so you cannot have a joint holding while investing in the name of a minor. Secondly, there is a need for a guardian who effectively runs this account till the time the child becomes a major. Once the child attains the age of majority, the transactions in this account will be temporarily suspended till the time you complete some documentation to convert that account into that of a major. After that, the child becomes the sole owner pretty much like any other regular investment and gets the rights to make any transactions in that account.

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