Assets in children's funds stood at Rs 25,675 crore in November 2025, an increase of 160% from Rs 9,866 crore in November 2020, as per ICRA Analytics data reported by Business Standard. Many families are now putting money into this category, and the children's fund lock-in rules apply to every rupee that goes in.
Children's funds are open-ended, solution-oriented schemes. Business Standard had reported in April 2018 that SEBI is the statutory regulator of India's securities market, with the legal duty to protect investors and to promote and regulate that market. Read the full meaning of SEBI categorisation circular of 2017 placed all solution-oriented funds, including children's funds, under a five-year lock-in.
How the lock-in is counted
As per the HDFC Children's Fund scheme document, the lock-in is at least five years or till the child turns 18, whichever is earlier. For fresh investments, including A SIP is a method of investing a fixed amount in a mutual fund scheme at regular intervals, usually monthly, by automatic bank debit. Read the full meaning of SIP and switch registrations made from 23 May 2018, the period is counted from the date of allotment of the units.
For the parents of a young child, the five year period will normally be the one that applies, as the child will not reach 18 before that. For a child aged 13 or older, however, the units will become redeemable at 18, which can shorten the holding period to less than five full years, as per an Oquilia explainer.
The HDFC fund invests 65-80% of its total assets in equity and equity related instruments, with balance in debt and money market instruments. A major part of the money kept under the lock-in is therefore exposed to the equity market.
What happens at 18
Once the child turns 18, systematic transfer plan (STP) instalments into the scheme are not allowed, as per the AMFI-hosted scheme information document of a children's benefit fund.
The folio is also frozen at that stage. It remains frozen until the status is changed from minor to major, and for this the child's The process in which a bank or other regulated entity collects and verifies a customer's identity, address and financial status before opening an account. Read the full meaning of KYC and bank details are required, as per a third party explainer from HRCS India Mutual Funds. Families who have held units in the name of a minor will therefore need to complete these formalities before any redemption can be processed.
The current wording of the rule is available on sebi.gov.in.
