How grandparents can invest for their grandchildren without hiccups
Subscribe to enjoy similar stories. They say interest is dearer than the principal. Grandparents tend to dote on grandchildren more than their own.
They don't just play with them but also want to secure their future financially. Most of them give the money meant for the grandchildren to the latter's parents. Investing in the name of grandchildren directly, unless the grandparents are their legal guardians, is not simple.
Take the case of Bengaluru-based Naga Subramanian. His father bought sovereign gold bonds (SGB) for Subramanian’s daughter in 2015. The physical bond document, which he gave to Subramanian, mentioned his daughter's name as a bond holder.
He passed away in 2019. The bonds matured in August 2024. When Subramanian approached the bank to get the maturity amount, it was clueless about any such investment.
"Since my father had invested physically by visiting the bank branch, the investment had no digital trace. We had closed our father's bank account. We reviewed his bank statement to see if interest payment of the bond was being credited during those years.
The bank couldn't help. We wrote to the Reserve Bank of India, but they told us to contact the bank," said Subramanian. After a lot of back and forth, Subramanian was finally informed that a new bank account had been opened in the name of the daughter in which the interest payment and the maturity amount had been credited.
He is in the process of claiming it. "The bank basically opened a new bank account in which it got the money transferred from my father's bank account to invest in SGB. My father was not informed about it because he would have told me.
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