Demat Account Opening For Minor: In the present scenario, more individuals are investing in the stock market to get a good return on investment. This is the place where the demat accounts come into play and are very significant. Demat, which is a short form of the word ‘dematerialisation’, refers to the process of converting securities into an electronic form.
Also Read: Don’t Have Demat Account? Can You Still Invest In Mutual Funds?
Prior to these introductions, investors had to deal by using physical copies of share certificates. Now, investors can hold investments like equity shares, debentures, bonds, exchange-traded funds, mutual funds, and others in electronic format.
Considering Demat accounts have become immensely popular in the last few years, it is now important to have an account for investing in equity shares.
That being said, at a time when parents make large investments for their children to secure their future and many are even resorting to stock market investments, they would also need to open a Demat account. Such accounts are operated by a guardian until the minor attains the age of 18.
Here’s how you can open a Demat account for a minor:
Documents required:
- PAN Card (parent/guardian)
- Address proof (parent/guardian) – Aadhar, Passport, driver’s license, Voter ID card, or other document
- Passport-sized photos of the parent and the minor
- Birth certificate of the minor, specifying the date of birth and name of the parents
How to open a Demat account for a minor?
- 1. Choose a depository participant (DP) with whom the account will be opened and it will act as an intermediary between the depositor and the investor. DPs in India are banks and financial institutions among others.
- 2. Fill out an account opening form with the proper KYC details of both the parent and the minor.
- 3. Submit the required documents to the DP along with the passport-sized pictures.
- 4. Next, an in-person verification will take place.
- 5. Upon completion of verification, the DP will provide the client ID and the account number.
A few things to keep in mind about minor Demat account
- 1. The parent/guardian will have control over the minor’s Demat account only until the minor reaches 18. During this time, the guardian can purchase, sell, and manage on the minor’s behalf.
- 2. Demat accounts belonging to minors can be used for trading in only equity delivery. Minors can’t trade in equity intraday or trade in equity or currency derivatives.
- 3. Demat accounts belonging to minors cannot be linked to an online trading account.
Comments
0 comment