HOW TO OPEN A MINOR DEMAT ACCOUNT IN INDIA

How to Open a Minor Demat Account in India

How to Open a Minor Demat Account in India

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A Demat (Dematerialized) account allows investors to hold shares and securities in electronic form. Parents or guardians can open a minor demat account for children below 18 years, helping them start their investment journey early. Here’s a step-by-step guide to opening a minor Demat account in India.

Eligibility Criteria

  • The minor must be below 18 years of age.
  • A parent or legal guardian acts as the account holder until the minor turns 18.

Steps to Open a Minor Demat Account

  1. Choose a Depository Participant (DP)

    • Select a stockbroker or bank registered with NSDL or CDSL (India’s central depositories).

  2. Fill Out the Application Form

    • Obtain and complete the Minor Demat Account opening form from the selected DP.

  3. Submit Required Documents
    The following documents are needed:

    • For the Minor:
      • PAN Card (if applicable)
      • copyright (as age proof)
      • Aadhar Card (for identity and address proof)
    • For the Guardian:
      • PAN Card
      • Aadhar Card
      • Bank Details (Cancelled Cheque)

  4. Sign the Agreement

    • The guardian must sign an agreement with the DP, stating that the minor’s account will be operated under their supervision.

  5. Account Verification & Activation

    • The DP verifies the submitted documents, and once approved, the Minor Demat Account is activated.

Important Points to Note

  • Trading Restriction: A minor cannot actively trade in stocks. Investments are allowed only for delivery-based transactions (no intraday or F&O trading).
  • Conversion at 18: When the minor turns 18, the account must be converted into a regular Demat account with fresh KYC documents.

Opening a Minor Demat Account is a great way to introduce children to investing and financial planning at an early stage.

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