Yes, minors can invest in mutual funds—but under some conditions. Here’s how it works:
Mutual Fund Investment for Minors – Key Details
Who Can Invest on Behalf of the Minor?
- A parent or legal guardian must open and operate the mutual fund account.
- The investment is held in the name of the minor, but managed by the guardian until the minor turns 18.
Documents Required:
| For the Minor | For the Guardian |
| Birth certificate or school ID | PAN card |
| Age proof | KYC documents (proof of ID and address) |
| Photograph | Relationship proof with minor |
Investment Options Available:
- SIP or Lump Sum: Both modes are allowed.
- All fund types (Equity, Debt, Hybrid, ELSS*) are open for investment.
*ELSS is allowed, but minor cannot claim tax benefit; guardian might if eligible.
At Age 18 – What Happens?
- The account must be converted to the minor’s own name.
- KYC of the now-major individual is needed.
- Fresh bank details and signature required.
- SIPs pause automatically until KYC update is complete.
Why Invest for a Minor?
- Great for building a fund for:
- Higher education
- Marriage or special events
- Future financial independence
- Early investment = greater compounding benefit
