The children’s gift funds are an open-ended type of mutual fund investments that are positioned at funding various life events of children such as higher education, marriage, etc.
Who can invest?
Investments in these funds can be made only in the name of the minor child.
The following persons, proposing to make a gift to a child of less than 18 years of age are eligible and may apply for subscription to the Units of the Scheme provided they are not prohibited by any law/ constitutive document governing them:
1. Resident individuals, such as parents, grandparents, step-parents, or legal guardians, may use the account with the tax status on behalf of a minor.
2. Non-resident Indians (NRIs) / Persons of Indian Origin residing abroad (PIOs) / Overseas Citizens of India (OCIs) as a guardian can invest in a CGF scheme.
The age of the beneficiary child, i.e. the Unitholder, must be less than 18 years on the date of the investment by the Investor / Applicant. The Guardian of the minor should either be a natural guardian (i.e. father or mother, as applicable) or a court-appointed legal guardian.
Subsequent purchases of Units may be made until the beneficiary child completes 18 years of age. All transactions / standing instructions / systematic transactions etc. will be suspended i.e. the account will be frozen for operation by the guardian from the date of the beneficiary child completing 18 years of age.
Redemption -
The scheme has a lock-in period of 5 years for each purchase or till the child attains the age of majority (whichever is earlier).
On attaining majority, an application form along with prescribed documents to change the status of the account from ‘minor’ to ‘major’ and also KYC Acknowledgment Letter of Unitholder becoming major needs to be provided. The major would then be able to redeem the funds.
How to invest in CGF via AssetPlus?
1) Minor account onboarding: https://l1nq.com/isrgP
2) Once the minor account is activated, the client can proceed with the investments in Children Gift Fund.