Demat Accounts for Minors

While you need to be 18 years old to open a Demat account, you can open one for minors as a guardian or parent. Even if the minor holds this account, they cannot trade in the stock market. Only you, as a parent or a guardian, can operate it until the minor becomes an adult. But you can transfer shares to the minor’s demat account. 

The earnings from these accounts are added to your income. This means the minor need not pay tax on the earnings. As there is no minimum age to open a Demat account, they could be used to teach the importance of investing to minors.

On Bajaj Markets, you can open a Demat account at affordable brokerage fees starting at ₹5 per order. Follow these steps to open an account:

1. Click on ‘OPEN ACCOUNT’ on this page

2. Add your personal and bank details 

3. Browse and choose from the subscription plans available 

4. Take a selfie video to complete eKYC 

5. Upload the required documents

6. Complete the e-sign process through Aadhaar

Note: Check the process and additional steps required for Demat accounts for minors.

Opening this account could help minors understand the capital market early on. They may also benefit from its growth potential. Here are some key advantages of opening:

1. Helps in Financial Planning

The returns earned from shares and securities could help plan the child’s future. As a parent or guardian, use the gains to finance education fees, marriage, and more.

2. Facilitates Financial Literacy

A Demat account for minors could help teach them about mutual funds and securities. This may improve their understanding of the stock market and concepts like risk. Such learnings could help them in the future when they take control of their account once they’re older.

3. Convenient Transfer of Shares

You can transfer company shares in the name of the minor, which they can sell after becoming an adult. If the assets are stored in the account for a long period, the minor may benefit from capital appreciation and enjoy higher potential returns.

The paperwork needed to open this account for minors differs slightly. Here are some documents you could keep handy: 

• Demat account opening form

• Birth certificate of the minor

• Photographs of the minor and the parent/guardian

• PAN card copies of both the minor and the parent/guardian

• Proof of identity and address in the form of an Aadhaar card, bank passbook, passport, bank statement, driving licence, and voter ID of the parent/guardian 

• Bank account details and statements of the parent/guardian

The documents required may differ across brokers or depository participants. Check their websites for the paperwork required to open a Demat account for children.