As per SEBI guidelines, a minor’s demat and trading account can be opened for any individual below the age of 18 years (in India).

Simply open a minor demat account in your minor child’s name. Start investing in mutual funds, stocks, and the like through this minor demat account.

To open a demat account for a minor following documents are required:

When you open a minor demat account, you will require the following documents:

PAN details of the guardian

PAN details of the minor

Proof of Birth of the minor

Proof of identity of the minor

Proof of address of the minor

The guardian needs to submit the required form properly filled out with the KYC details of both the guardian as well as the minor.

Once the details are verified, the DP will issue a client ID and account number.

When the Minor reaches 18 years of age

When the minor reaches the age of 18, he or she must submit a request to his or her registered broker to convert the minor demat account into a major demat account.

The following documents are required to convert a minor account into a major account:

Pan Card
Address Proof
Bank Statement
Passport-size Photographs

Once the documents are validated, the guardian’s credentials will be replaced by the minor’s (now the major’s) information.

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FAQ’s on Minor Demat Account

Can I open a demat account for a minor?

Yes, you can open a demat account for a minor if you are the parent or guardian. However, there are specific procedures you need to follow when setting up a minor’s demat account online with a stock broking firm like SMIFS.

What Happens to the Demat Account When a Minor Turns Major?

When a minor turns 18, they have two options:

Close the Minor Demat Account and Open a New Major Demat Account: The minor can close their existing account and open a new one as an adult. All securities from the minor account can be transferred to the new major account.
Convert the Minor Demat Account into a Major Demat Account: The minor’s existing account can be converted. The individual will need to sign a new agreement with the depository participant (DP) and complete the necessary procedures for converting the account. This involves replacing the guardian’s credentials with those of the now-major individual.

What are the Benefits of a Minor Demat Account?

A minor demat account allows parents or guardians to manage their children’s financial future more effectively. It can be used to save for various expenses, such as college education, marriage, job relocation, and more.

Can I do trading in a minor demat account?

Yes, as the parent or guardian of the minor, you can trade using your child’s minor demat account.

Can I sell shares from a minor demat account?

A minor cannot trade directly from their minor demat account. However, as the guardian, you can transfer shares from the minor’s demat account to your own demat account and then sell them.

Can a minor demat account be opened online?

Yes, a minor demat account can be opened online with a trusted brokerage firm like SMIFS, provided the minor has a PAN and AADHAR card. If the minor’s AADHAR is not linked to a mobile number or if the minor lacks an AADHAR card, the account must be opened offline. If the AADHAR is linked to a mobile number, the account can be opened online.

What are the limitations in a minor demat account?

There are a few restrictions when opening a minor Demat account. First off, a minor is unable to independently manage a Demat account. To open a minor Demat account, the stockbroker will need the documentation of a parent or legal guardian. Secondly, a minor’s Demat account can only be used for trading in equities; minors are not permitted to trade currency or equity derivatives or engage in intraday equity trading. Thirdly, an online trading account cannot be connected to a minor’s Demat account.

Can I close a minor demat account before my kid turns an adult?

Yes, you can close a minor account before your child reaches adulthood.

What is the minimum age for minor Demat account?

Investing in the Indian stock market has no age restrictions. You can open a demat account either as an adult or as a minor to trade in the stock market.