Want to invest in the name of a minor child? Many parents choose fixed deposits (FD) or recurring deposits (RD) for this. Even if your child does not have a PAN, you can still open a bank account and invest.
You can open an account in your child’s name in the bank where you already have a savings account. Most banks require this for opening a minor account. On November 17 this year, HDFC Bank said on its website, “You must have a savings account in your name in the bank where you want to open a savings account for your child.”
Parents must also follow the bank’s KYC rules. To open an account for a minor, you need to submit copies of valid documents.
Required Documents to Open a Minor Account
The documents needed to open a bank account for a minor can vary from bank to bank. A Reserve Bank of India circular from May 6, 2014, says, “Banks may, based on their risk system, set limits for age and amount. Minors may be allowed to operate deposit accounts themselves. Banks can decide what minimum documents are needed to open an account for minors.”
Types of Bank Accounts for Minors
There are two types of accounts for minors:
- For children above 10 years – The child can operate the account on their own.
- For children below 10 years – The guardian will operate the account.
- In both types, KYC of the minor and the guardian is required.
Other Required Documents
- If the child is below 10, the guardian is the first holder and the child is the second holder.
- If the child is above 10, the child will be the first holder.
- A photograph of the guardian is needed. Some banks also require a photo of the child.
- For children above 10, the bank may ask for the child’s signature. Otherwise, the parents’ signature is needed.
