Open A Demat Account For Your Minor Child

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  • 03 Feb 2023

How do you instil the value of financial planning in your child? Simply open a demat account in your minor child’s name. Invest in mutual funds, stocks, and the like through this account.

How To Open Demat Account For Minors

  • The parent or guardian must select a depository participant (DP) with whom to open the account.
  • They must fill out an account opening form with the KYC details of both guardian and minor.
  • They must submit the requisite documents to the DP along with a passport-sized photograph.
  • In-person verification will take place later.
  • After approval, the DP will provide the client ID and account number.

Related: Why every Indian must have a demat account

Restrictions On Demat Account For Minors

  • A minor cannot be a joint holder of a demat account.
  • You cannot link this type of account with a trading account.
  • The guardian can operate this account until the minor reaches adulthood.
  • This account cannot be used for equity intraday, equity derivative, and currency derivative trading.
  • The guardian can use this account only to buy or sell delivery shares. Related: Features of demat account

When The Minor Attains Adulthood

If the word ‘minor’ was mentioned when opening the account: The account must be closed. A new one can be opened in the account holder’s name.

If the word ‘minor’ was not mentioned when opening the account: The account holder should submit a fresh account opening form along with a KYC application. The DP will give a copy of the agreement to the account holder. In the account details, the DP will delete the guardian’s signature. The account holder’s signature will be needed instead.

The DP will transfer the holdings of the minor demat account to the new demat account opened by the account holder.

Also Read:

Einstein’s theory of relativity and money

5 things you should know about depository receipts

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