According to Association of Mutual Funds in India (AMFI) guidelines, investments made through third-party cheques will not be accepted by mutual funds. A cheque issued and signed by any person other than the first holder of the investment is treated as a third-party cheque.
There are a few exceptions applicable to this rule too. Payments done by parents/ grand parents/ immediate relatives on behalf of a minor are accepted up to an upper limit of Rs. 50,000 per SIP installment or regular purchase. Payment done by employer on behalf of employee under SIP scheme is also allowed.
These exceptions are accepted only if there is a declaration is presented mentioning the relationship of the third party with the first holder of the investment. Also the PAN card, KYC acknowledgement of person paying on behalf of the first holder has to be attached with the application form. In case there are more than one account from which the payment is done, then multiple accounts has to be registered when the application is submitted.
In case of loan repayments, there is no such restriction for third party check. So if one has a home loan or car loan the repayment can be done from anybody’s account.