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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jun 20, 2025Hindi

I have invested in Sbi Magnum Low Duration Fund for my child for long term. My broker told me that I can't track this fund on my phone like other mutual funds. My broker also told that after child attains 18 years age the final amount will be credited to my child's bank account. I want to know if my broker is telling truth or misleading me. Pls clarify

Ans: You’ve taken a thoughtful step by investing for your child’s future. Let’s look at the facts clearly, in simple words, about what your broker told you.

? Can you track the fund on your phone?

– Yes, you can track this fund using mobile apps or websites.
– You can use CAMS, KFintech, or the AMC app to check details.
– Just log in with your PAN or Folio number.
– There is no rule stopping you from tracking this fund online.
– Your broker's statement that tracking is not possible is not true.

? Will the amount go directly to your child after age 18?

– This fund is a normal debt mutual fund.
– It is not a children’s gift or benefit plan with lock-in features.
– When your child turns 18, there is no auto-credit to their account.
– Mutual funds are not credited automatically on a specific birthday.
– You or the registered holder must initiate a redemption manually.
– So this part of the broker’s statement is misleading too.

? How mutual fund folios work with children

– If the folio is in your name, you control the investment.
– If the child is listed as a minor investor, you act as guardian.
– When the child turns 18, you need to update KYC and change the guardian structure.
– Only after that the child can operate the folio independently.
– Until then, nothing is transferred automatically.

? Why your broker’s claims raise concerns

– Saying the fund cannot be tracked digitally is not true.
– Saying it will auto-transfer funds at age 18 is also incorrect.
– These are not features of this specific fund.
– Only few children-specific mutual fund schemes have such features, and even those require formal steps.

? What you can do now

– Check the folio status using online apps or the AMC portal.
– Confirm whether the investment is under your name or your child’s name.
– Ensure the bank account and contact details are correctly linked.
– If the folio is in your child’s name, prepare for KYC update once the child turns 18.
– If the investment objective is long-term, review if this fund suits that purpose.

? If your goal is long-term child investment

– Low duration debt funds usually give 6–8% returns.
– These are better suited for short-term needs.
– For education or long-term goals, you may need more equity allocation.
– You can consider actively managed equity mutual funds.
– These funds offer better potential over long horizons.

? Why to avoid index funds

– Index funds copy the market and do not aim for better returns.
– They cannot protect downside during poor market conditions.
– Actively managed funds adjust based on economic and market signals.
– This gives better risk-adjusted returns.

? Why to avoid direct mutual fund plans

– Direct plans look cheaper but come without professional guidance.
– Mistakes in asset allocation can lower returns over time.
– Regular plans through a Certified Financial Planner give expert monitoring.
– A planner also helps realign your portfolio with life stages and goals.
– This is vital for long-term child goals.

? Things to keep in mind going forward

– Review your overall child education goal.
– See if your current fund will meet that purpose.
– If not, plan a mix of active equity and balanced hybrid funds.
– Track all investments yourself using mobile or web access.
– Ask questions if any advice seems unclear.
– Keep all folio documents and child KYC ready when they near 18.

? Finally

– Your broker’s guidance was partly wrong.
– You can track your fund online like any other.
– No automatic credit happens at age 18.
– This fund is a simple debt fund, not a children-linked product.
– For long-term goals, align with better-suited investment options.
– Use Certified Financial Planner services to build and review your child’s education plan.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.