Children below the age of 18 years in India are consider as a Minor.
Yes, both demat and trading account can be opened in the name of a minor child. The account will be operated by a guardian till the minor becomes major, Guardian has to be the father or in his absence mother. In absence of both, father or mother, the guardian can be appointed by court.
The guardian is legally entitled to open, operate and even close the bank account, demat account and trading account on minor name. Note that two KYC Application Forms must be filled i.e. one for the guardian and another for the minor (to be signed by guardian).
Things to know about Minor Demat / Trading Account
- The legal guardian has to provide all the documents and fulfill the KYC norms.
- PAN Card of legal guardian is required for opening the demat or trading account.
- The date of birth certificate is required from minor child.
- When minor turns major, the account becomes inoperative. New separate account has to be opened in this case. Demat holdings can be transferred from minor account to major account.
- If paper shares are held jointly with a minor, they need to first be transferred to the minor and then to the demat account in the minor's name.
- A 3-in-1 Account (Bank+Trading+Demat) can be opened in the name of a minor.
Minor's Account Trading Restrictions
- Minor Trading Accounts are allowed only to invest in stock market (Equity Delivery Trades only).
- They are not allowed to trade in following segments:
- Equity Intraday
- Equity Derivative Trading (F&O)
- Currency Derivatives (F&O)