People are investing more money in the capital markets because the Indian economy is growing faster. As the market grows, more and more adults and kids are getting in on the action. If a person is younger than 18, how can they open a Demat account? When you open a minor Demat account, the following sections answer questions like these so that you can make an informed choice about it.
Step by step process of opening Minor Demat Account
If you want to open a Demat account for minors, you have to follow well-organized steps. There is no minimum age to open a minor Demat account.
- Make sure the website of a stockbroker who is part of either CDSL or NSDL is the one you go to open a minor Demat account on the internet.
- The broker will need to know your name, email address, phone number, etc.
- You must fill in the KYC (Know Your Customer) information for your child and your parent or guardian.
You must send in the proof of your identity (PAN card), address, birth certificate, and bank account information if you want to open a Demat account for a child. You will open a minor Demat account after you have sent in all of your documents and they are verified by the company or stockbroker. However, it is essential to point out that a minor Demat account can never be opened as a joint account, even if both people are adults.
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Essential things to keep in mind when setting up a minor Demat account
A Demat Account for Minors
An account for minors to open a Demat and trading account can also be done. A minor cannot open a Demat account, but it isn’t true that they can do so. Instead, the parents of the minor can open and run the demat for minors until their child is old enough to do so on their own. This has a lot of advantages, like letting parents give their kids a head start with investments through a Demat account for kids.
The Trading Account
As long as a minor is old enough to open a Demat account, it isn’t as easy for them to trade in equity through a stockbroker app. However, as a rule, they can’t do that at all. Some authorities say you cannot get a small Demat and trading account. A minor can’t use a trading account to buy or sell stocks, do intraday trading, or buy or sell stock. It can only be used to sell equity that has been given to you as a gift, transferred from your family, or given to you by the government.
Joint Ownership
It’s part of the rules for Demat accounts for minors that a minor can’t be a joint owner of any of the Demat accounts. If their name is on a Demat account for minors, it must be their own, even though their guardians are in charge.
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Advantages of Minor Demat Account
A minor Demat account has the following benefits:
Better Financial Planning
Equity stocks and mutual funds are often better investments than other investments. A minor Demat account lets parents and guardians plan better for their children’s money. Thus, you can use this account to save for your kids’ college, weddings, moving for work, and other things.
Having a minor Demat account helps kids learn how to be financially independent. They are involved in the stock market and learn essential life skills that help them stay alive in the world.
A minor Demat account can only be opened by people at least 18 years old. To open a petty Demat account, there are a few steps. To open a free online minor Demat account quickly, click on this link and follow the steps.
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