No one can invest in shares, mutual funds, ETFs and bonds without an account. If a parent wants to invest in shares in their child’s name, he will need a small demat account. Demat account can also be opened online and offline for minors. Let us know what things are needed to open a demat account for a minor.
Age to open a demat account: There is no age limit to open a demat account. Investment can be made by opening a demat account at any age. Minor’s demat account can be opened with parents. Parents can open a demat account in the name of the child by adding it to them at any time, which will not be a joint account.
Which documents are needed: You will need some documents to open a demat account in the name of the child. In this, you can provide parents’ PAN card, Aadhaar card for address, driving license and other documents. Apart from this, the birth certificate, on which the name of the parents is also inscribed, the bank account of SEBI KYC and the minor will also be necessary.
Parents’ signature is required to open a demat account of a minor. Signature can be made both online and offline. For this, parents’ Aadhaar card will be necessary. Along with the photo of a minor in the demat account, a photo of parents will also have to be uploaded. KYC, PMLT and FATCA are mandatory for both parents and minors.
You cannot buy shares directly from the market; Demate-trading accounts are required for investment and sale in shares, mutual funds and ETFs. However, no stock can be purchased in the stock market from a small demat account. The Indian Contract Act 1872 states that no minor can enter financial transactions. Demat account will be controlled by parents.
How to buy and sell shares from a demat account of a minor: A minor cannot invest directly into the stock market or mutual funds through a demat account. Shares obtained as a gift can be placed in the demat account of the minor and these shares can be sold under the minor’s trading cum demat account.