Can minor open demat account? Are you below 18 years of age and want to start investing in the stock market? Then the answer is, yes, a minor can also open a demat account.
A minor demat account also gives the perfect opportunity to parents looking to secure their child’s future. Apart from this, a parent/guardian is required to take care of the minor demat account till the time they turn 18. After the individual has attained the legal age, he/she can change the minor demat account into a regular demat account.
But how can a minor open a demat account? Here is the complete detail.
When it comes to open a demat account only the parents or court-appointed guardians are eligible for opening the demat account for the minor. The process that needs to be followed is very simple.
- Demat account form must be filled by the guardian only.
- Two KYC forms should be filled – one for the minor and the other for the guardian.
- Required documents of both the minor and the guardian along with other documents have to be submitted by the guardian.
The demat account in the name of a minor will be opened after completing this process.
But what are the documents required for a minor demat account? The list is as follows.
- Proof of Identity
- PAN Card (of both the minor and the parent/guardian)
- Any age proof like a birth certificate.
- Photographs of both minor and parents.
- Aadhar card (both)
Apart from this, there are certain other things that an individual should keep in mind before opening a minor demat account.
- Till the time the minor becomes a major, the minor demat account can only be handled by the guardian.
- An agreement between the customer and the stockbroker must be signed (if the word “ Minor “ was not mentioned at the time of account opening) for the minor account to function even after the minor turns 18.
- You can’t link a trading account to a minor demat account and therefore, it can’t be used for Intraday equity and derivative trading.
- A minor demat account can only be used for buying and selling delivery shares.
Well, a minor can open a demat account even though it comes with certain restrictions. You can plan your child’s future financially or instill financial literacy by opening a minor demat account in the name of your child at an early stage.
Hopefully, we solved your confusion regarding a minor demat account opening. Feel free to drop any such confusion in the comments below and we will solve them.
