Demat Account under 18
Minors below the age of 18 are not eligible to open a demat account on their own. They can be joint holders in a demat account with their parent or legal guardian, who will act as the primary account holder and have control over the account. The minor's name will appear as a secondary holder on the account. However, it is advisable to consult with a financial advisor or the concerned bank or depository participant to understand the specific requirements and regulations in this regard.
In India, the minimum age to open a Demat account is 18 years. A Demat account is used to hold and manage shares and other securities in electronic format. Minors under the age of 18 cannot open a Demat account on their own, but they can be a joint holder with a parent or legal guardian.
Can minor be a joint holder in another demat account?
Yes, a minor can be a joint holder in another person's Demat account. This means that the minor will have joint ownership of the securities held in the account along with the primary account holder. However, the primary account holder is typically responsible for managing the account and making investment decisions. It's important to keep in mind that the minor must have a legal guardian or parent as the primary holÞr, as they are not legally able to open a Demat account on their own until they reach the age of 18.
Important rules to follow for Demat accounts for minors.
Here are some important rules to follow when opening a Demat account for a minor:
1. Age Limit: The minor must be at least 18 years old.
2. Guardianship: The minor's legal guardian or parent must be the primary account holder.
3. KYC Compliance: The minor and the primary account holder must complete the required Know Your Customer (KYC) process.
4. Joint Holder Documentation: The joint holder agreement must be signed by both the minor and the primary account holder.
5. Authorized Signatories: The primary account holder will typically be the only authorized signatory for the account, but this can be changed if necessary.
6. Limited Transactions: Minors are usually only allowed to make limited transactions, such as buying and selling securities, and may not have full control over the account
7. Reporting Requirements: The Demat account must comply with all reporting requirements, including disclosing the minor's name, age, and relationship to the primary account holder.
8. Tax Implications: The Demat account will be subject to taxes and regulations, including the Securities Transaction Tax (STT) and capital gains tax.
Also Read- Best Demat and Trading Account by Indian Stock Brokers in 2022
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