Minor Demat Account: Everything You Need to Know
Minor Demat Account: Everything You Need to Know
Blog Article
A minor demat account is a special type of Demat account that can be opened for individuals below the age of 18. This account allows parents or guardians to invest in stocks and securities on behalf of the minor.
Key Features of a Minor Demat Account
- Ownership: The account is in the name of the minor but is operated by a parent or legal guardian.
- Investment Restrictions: Direct trading is not allowed; only delivery-based investments are permitted.
- KYC Requirements: Guardian's PAN, Aadhaar, and other documents are needed for verification.
- Conversion to Regular Account: Once the minor turns 18, the account must be converted into a regular Demat account.
Documents Required
- Minor’s Documents: copyright, Aadhaar card
- Guardian’s Documents: PAN card, Aadhaar card, bank details
- Photographs: copyright-size photos of both minor and guardian
Benefits of a Minor Demat Account
✅ Helps in early financial planning
✅ Allows parents to build wealth for their child’s future
✅ Gains from investments can be reinvested for long-term growth
Limitations
❌ No intraday or derivative trading
❌ Guardian must manage the account until the minor turns 18
Conclusion
A Minor Demat Account is an excellent way to introduce children to investing while securing their financial future. It is a great tool for parents who wish to invest in stocks, mutual funds, or bonds for their child's benefit.
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