Wondering how to start investing in Mutual Funds for children?

Ever asked yourself – “What’s the best way to start investing for my kid?”

If yes, you’re not alone. Many Indian parents today are looking beyond traditional options like FDs and LICs and turning to mutual funds for smarter, long-term wealth creation.

But when it comes to investing in your child’s name, the process may seem confusing at first. Who can open the account? What documents do you need? And how exactly does it work when the child is still a minor?

In this article, we’ll walk you through everything you need to know to start investing in mutual funds for your child and help you give them the financial head start they deserve.

Step 1: Understand the Basics

A minor (anyone below 18 years) can’t legally operate a financial account on their own. But that doesn’t mean you can’t invest for them.

A mutual fund for minors is like any other mutual fund investment. As a parent or legal guardian, you can open a mutual fund account in your child’s name and manage it on their behalf until they become an adult.

Step 2: Complete the KYC Process (For You and the Minor)

Completing the KYC (Know Your Customer) is a basic requirement for all mutual fund investors in India, including minors.

Since your child is under 18, the KYC will be done in their name, but you, as the guardian, will complete and submit the documents on their behalf.

Here’s what you’ll need:

Your documents (as the guardian):

• PAN card
• Aadhaar or another valid address proof
• A passport-size photo

Your child’s documents (the minor):

• Birth certificate (to prove age and your relationship)
• Recent passport-size photo (optional on some platforms)
• PAN card (if available)

Once the documents are submitted, your child’s mutual fund account will be linked to your KYC details as the guardian. After this is complete, you’re all set to open the minor’s investment account.

Step 3: How to Open Mutual Fund Account for Minor

A mutual fund account for a minor can be opened through any of the following options:

• Through an AMC directly (mutual fund company)
• Through Vaaradhi Finserv

The account will be created in your child’s name, with you as the designated guardian. Keep in mind that any withdrawals or redemptions will go only to the child’s bank account, not yours.

Once the account is set up, you can start investing in schemes suited to your goals.

Step 4: Choose the Right Fund Based on Your Goals

At this stage, you tailor your investment strategy based on your child’s specific future goals and financial needs.

Are you planning for higher education? A milestone event like a wedding? Or just want to build long-term wealth?

Here’s how to choose:

For long-term goals (10+ years) like college or a professional course, consider equity mutual funds or index funds. They carry short-term risks but can offer better returns over time.

For medium-term goals (5-7 years), hybrid or balanced funds offer a good mix of safety and growth.

For short-term goals of 2–3 years, it’s wiser to choose low-risk options such as debt funds or liquid funds to protect your capital while earning modest returns.

Step 5: Start Investing- SIPs or Lump Sum?

You can begin with a small Systematic Investment Plan (SIP), even ₹500 a month is enough to get started. SIPs are perfect for creating a habit and staying consistent.

If you have a lump sum, like a bonus or gift money, you can invest that as well. Just make sure the fund matches the time frame of your goal.

Step 6: What Happens When Your Child Turns 18?

Once your child turns 18, the account legally belongs to them. The guardian’s role ends here.

In order to take full control of the account, your child will need to:

• Complete their own KYC
• Submit identity and address proof
• Convert the minor account to a major account

After that, they’ll have full control over the investments you started for them.

Final Thoughts

Investing in mutual funds for children is more than just a financial decision; it’s a gift of confidence, independence, and opportunity.

Starting early is always a smart move, as it gives your investments more time to grow and benefit from compounding.

If you’ve been wondering how to open mutual fund investment account for your children, We provide complete investment services in mutual funds for your kids or nephew or niece

There are many types of mutual fund schemes available in the market. To decide which one is right for your child, reach out to us today and take the first step toward building your child’s financial future.