Minor Demat Account: Want to open a account for children to invest in the stock market? Know the step by step process

Minor Demat Account: For the sake of childrens better future, parents invest in various types of investment schemes. This also includes traditional and safe options like bank fixed deposits. However, the returns here are not very attractive. If you are willing to take a little risk, then the stock market can be a great option. You can open a demat account in the name of children through market regulator SEBI, which is called a minor demat account. With the help of this account, you can create a large fund by investing in the name of your child.

Is it easy to open a demat account?

A demat account is mandatory for trading in the stock market. A demat account can be easily opened on a trading platform like Zerodha. For this, you will need just a few necessary documents and follow the guidelines, after which you will be able to easily open a demat account for your child from home.

What is the provision?

There is no age limit to open a demat account, that is, you can open an account in the name of your minor child and start trading. However, there are some terms and conditions for minor demat accounts, which must be followed. For example, such accounts can be operated only by parents or guardians. The minor account holder will have the right to trade independently only after attaining the age of 18 years.

To open a minor demat account, you will need some documents. For example, PAN card of the parents or guardians, their address proof. For this, Aadhaar, passport, driving license, voter ID etc. can be given. Apart from this, the child’s birth certificate, on which the name of the parents should also be recorded. The parents or guardians will have to complete the KYC process of SEBI and provide the relevant bank account details. Also, while opening the account, the photo of the minor as well as the parents’ photos will be required. Demat account can be opened online or offline.

How will trading happen?

The most important thing to note is that one cannot invest directly in the stock market or mutual funds from a minor demat account. Shares received as gifts or donations from family members can be kept in this account. This means that the parents or guardians will make the purchase from their demat account and then send it to the child as a gift. The option of ‘Send as Gift’ is given in the demat account. Shares received as gift or donation can be sold later as per convenience.

Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.