Planning to start an SIP for your child? Radhika Gupta answers 4 FAQs

While advocating the benefits of investing in mutual funds through SIP in children’s names, CEO of Edelweiss Mutual Fund Radhika Gupta answers four FAQs on queries she received.

The CEO posted on her social media that for creating a minor folio only the guardian’s PAN is mandatory, the minor’s PAN is optional.

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She posted, “Since I got so many queries on this, some FAQs. Can I create a minor folio if the minor doesn't have a PAN? Yes, a minor’s PAN is optional for creating a folio. Only the guardian’s PAN is mandatory.”


Commenting on the documents needed for minor folio creation, Gupta mentioned that the guardian’s PAN is needed along with the relationship proof documents such as the minor's birth certificate, passport, or court-appointed document and the minor’s PAN is not mandatory.

On a query received if one can subscribe to SIP from both the guardian’s and minor’s bank accounts, Gupta answers in the affirmative, stating that both guardian’s and minor’s bank accounts can be used for SIP subscriptions and lumpsum transactions and redemptions will only be credited to the minor's bank account.

Gupta clarified that minor folio creation may take up to two business days, subject to verification of the minor/guardian relationship document and the first transaction can be initiated at the time of folio creation or later, once the folio is created.

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Earlier this week, Gupta shared the benefit of starting an SIP in a child's name. The benefit of starting an SIP in one’s child's name not only teaches good money habits later, but when the folio belongs to the child, one tends to be more goal-oriented and think long term, the CEO of Edelweiss Mutual Fund. One should ideally start this as soon as possible and for a specific goal, she added.

She posted on social media, “One of the things I've been talking about a lot is the benefit of starting an SIP in your child's name, ideally as soon as possible and for a specific goal. Not only does this help teach good money habits later, but when the folio belongs to the child, you tend to be more goal-oriented and long-term.”

According to Sebi, children’s funds have a lock-in for at least five years or till the child attains the age of majority, whichever is earlier.