Want To Open A Minor Demat Account? Here's How You Can Do it

Under the Companies Act of 2013, any Indian citizen, regardless of age, is allowed to hold shares in publicly listed companies. This legal provision enables the opening of a minor's Demat account

You can visit the website of a stockbroker affiliated with CDSL or NSDL to initiate the process

Source : PTI

Investing in the stock market is not just limited to adults; children are also participating, eager to capitalise on the market's remarkable growth. Anyone who is interested in the stock market must have a Demat account to electronically store their bought or sold shares. Two main entities manage these accounts: the Central Depository Services Limited and the National Securities Depository Limited.

Typically, any Indian citizen aged 18 or above is eligible to open a Demat account. Moreover, joint investors, corporate firms, and Non-Resident Indians (NRIs) can also open Demat accounts. As per the Indian Contracts Act of 1872, minors are prohibited from entering into financial agreements. However, under the Companies Act of 2013, any Indian citizen, regardless of age, is allowed to hold shares in publicly listed companies. This legal provision enables the opening of a minor's Demat account in India.

Even though a minor technically owns a Demat account, they cannot independently trade shares. Instead, a parent or legal guardian must oversee the account, facilitating the transfer of shares as gifts. Therefore, the responsibility for opening, closing, and managing the account rests with the minor's parent or legal guardian until the child turns 18.

How To Open A Minor Demat Account

You can visit the website of a stockbroker affiliated with CDSL or NSDL. Initially, you'll need to provide basic details like name, email ID, and telephone numbers. The next step involves submitting KYC (Know Your Customer) information for both the minor and their parent or guardian.

Documents Needed To Open The Account:

• PAN card as Proof of Identity for both the parent/guardian and the minor.
• Aadhar card as Proof of Address for both the parent/guardian and the minor.
• Birth certificate of the minor.
• Bank account details of the parent/guardian.

After gathering these documents, submit them to the stockbroker. If the documents are verified and approved, the stockbroker will proceed with opening the minor Demat account.