Investors from India and abroad are flooding the capital markets with cash as the Indian economy is growing faster than it did previously. Additionally, kids join the fray to capitalize on the market’s expansion and earn earnings that defy gravity. So how can a minor open a Demat account, and what age is required to do so?
Let us find out!
Eligibility of opening a Demat Account
Anyone in India who is over 18 years old can open a Demat account. To open a Demat account, PAN is a mandatory document to be submitted along with other documents like address proof, income proof, etc.
Can a minor open a Demat account?
Parents or designated guardians may open an account in a minor’s name by submitting the appropriate paperwork. Until the minor reaches adulthood, the account will be managed by the parents or guardian(s). In actuality, until the minor turns 18 years old, the parent or legal guardian of the minor has complete authority over all matters relating to the opening, closing, and management of a minor Demat account.
Features of a minor Demat account
- Mutual funds and equity stocks frequently offer higher returns than other investment vehicles. Parents and guardians can better arrange their children’s finances by opening a minor Demat account.
- You can utilise this account to save money for your children’s college expenses, weddings, work moves, etc.
- Promotes financial literacy by exposing kids to the concept of financial independence through a small Demat account.
- They gain essential life skills necessary to survive in the world as they become involved in the stock market details.
Note: You can open a Demat account online for free and download the Shoonya app- India’s first and only zero-commission trading app.
How to open a minor Demat account
- You must visit the website of a stockbroker who has been appointed with CDSL or NSDL to register a small Demat account online.
- Before moving on to the next phase, the broker will require some basic information from you, such as your name, email address, phone number, etc.
- You must fill out the minor’s and parent/KYC guardian’s (Know Your Customer) information in the following step.
- The PAN card, the Aadhar card, the child’s birth certificate, and the bank account information of the parent or guardian are among the documents that must be submitted to open a minor Demat account.
- The minor Demat account will be opened once all of your required documents have been received and are deemed acceptable by the stockbroker.
What happens when a minor turns major
Once a minor reaches the age of 18, their Demat account is no longer active. Therefore, the account holder must submit a brand-new Demat account opening application form and the necessary paperwork. However, the guardian or parent’s signature won’t be required. The shares will be moved to the new account, and the account user can trade or invest.
It is now possible for minors to open a Demat and trading account. Alternatively, the Demat can be opened and run by the minor’s parents (the father and, in their absence, the mother) until the child reaches adulthood. Now that you know the account opening requirements and the minimum age to open a minor Demat account, it is time to put your knowledge to use to create a bright future for your kids.