Process to open a minor’s demat account However, it needs to be opened with a parent or guardian
While investing for children for their future, parents may want to invest in securities in the name of the child. This can be achieved by opening a demat account for the minor child. Here is the process to open a minor’s demat account.Pre-requisites
There are no minimum age criteria for opening a demat account in the name of the minor. However, it needs to be opened with a parent or guardian.
Documents
While opening this account, documents of both the child (minor) as well as the parent/guardian need to be submitted. PAN (proof of identity) and proof of address of both minor and guardian are required. Additionally, the birth date proof (birth certificate) of the minor needs to be furnished. Bank account details of the minor’s bank account also needed. .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:10px;font-weight:500;line-height:18px;} #sr_widget .sr_desc{margin:0 auto 0;} #sr_widget .sr_desc{color: #024d99;}
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Limitations
Minors demat account cannot be used for trading — therefore it cannot be linked to an online trading account. The account also cannot be used to carry out intra-day trading activity or trading in derivative contracts.
Once minor turns 18
After turning 18 years of age, the minor demat account becomes inactive. A fresh demat account needs to be opened with new documentation. The shares in the minor’s demat then can be transferred to the new demat account.
Points to note
A minor demat account cannot be opened jointly.A minor child can be taught the concepts of saving, investing and the power of compounding in a live and practical way by investing through the minors demat account.Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
