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If you want to invest in mutual funds for your children, then you will have to wait for a month now. Because according to a new SEBI circular, now parents or legal guardians will soon be able to invest in mutual fund schemes for their children from their own bank accounts. They will no longer be required to open joint accounts or to open accounts of minor children. Earlier, parents were not able to invest in mutual fund schemes from their own bank account in the name of children.
Payment for investment in any mode shall be accepted from the bank account of the minor, the parent or legal guardian of the minor or the joint account of the parent or legal guardian of the minor. SEBI also said that for the existing portfolio, the AMC should insist on a change in the pay-out bank mandate before the redemption process.
Money will be deposited in the verified account of children
However, as per the new SEBI circular, mutual fund investments made in the name of a minor will be credited only to the verified bank account of the minor child. SEBI said that irrespective of the source of payment for subscription, all proceeds shall be credited only to the verified bank account of the minor, i.e. the minor may be accompanied by a parent/legal guardian after completing all KYC formalities.
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The new rule will be applicable from June 15
According to SEBI, all other provisions mentioned in the 2019 circular will remain unchanged. The new rule will be effective from June 15, 2023. That is, parents of children will be able to invest in mutual fund schemes in the name of their children from June 15. You can easily secure your children’s future by investing in mutual fund schemes. Because even investing in mutual fund schemes gives a good return.