Zerodha investors can now invest in mutual funds using a minor’s account

Zerodha mutual fund investors can now invest in mutual funds using a minor’s account, according to a post by Coin by Zerodha on social media platform. The investor can buy stocks, mutual funds, exchange traded funds (ETFs), government bonds, and sovereign gold bonds on behalf of their children through Zerodha minor account and can gift them. However, intraday trading and future option trading is not allowed for minor accounts.

Earlier, if investors had an account in their child’s name, it was not easy for them to invest directly in mutual funds using a Coin account. Until now, investors had to purchase the mutual funds in their own account and then do an off-market transfer to the minor’s demat account.

“Until now, you had to first purchase mutual fund units in your account and then do an off-market transfer to the minor account, resulting in a broken experience,” said Zerodha.

You can now directly invest in mutual funds using a minor account on Coin.

Until now, you had to first purchase mutual fund units in your account and then do an off-market transfer to the minor account, resulting in a broken experience.

Here’s everything you need to know👇 pic.twitter.com/zImHZDY5PL

— Coin by Zerodha (@CoinByZerodha) August 14, 2024

The investor needs to open the Zerodha account in their kids name through a process shared by Zerodha. An investor needs to login to the Zerodha account using minor account details.

The investor can even set up a SIPs to invest regularly and automate the SIP using mandates. The mandates will be activated within three working days.

We have always wanted to help parents save in a simple and easy way for their kid’s future. You can now open a Zerodha account for your kids online and invest in stocks, mutual funds, and bonds with them. pic.twitter.com/zcOJCj1NAz

— Zerodha (@zerodhaonline) January 25, 2024

After selecting the fund for SIP, an investor can step up the existing SIP each year by a predefined percentage.Zerodha also shared a few important points which clearly specified which bank account can be used for making payments, where the MF redemption amount will be credited. From making the payment and getting the redemption amount, the investor needs to use only the minor’s bank account linked with Zerodha as requests from guardians or other accounts for withdrawal will be rejected.

When the minor turns 18, the minor account needs to be converted to an individual account. While making investments through a minor account, the guardian is liable to pay taxes.