Accounting

Demat Account for Minor

0 38

Demat account is the primary requirement for trading and investing in the Indian stock market. The introduction of demat account has resolved many problems that traders and investors use to face earlier when the shares were held in the physical form. With this account, the whole process of completing a transaction has become smoother and quicker.

In order to transact in the Indian stock market, it is mandatory to open a demat account with the broker by completing the necessary formalities. The demat account is often used by individuals to invest their savings. Many people open a demat account for their children so that they can invest for their future.

In this article, we will learn about the details of demat account for minor.

Let us first learn about the condition that must be fulfilled for demat account opening for minor.

Condition for Opening Minor’s Demat

A demat account for minor is legal and can be opened in his/her name. However, the only condition for opening a demat account in the name of the minor is that it must be opened only by the natural guardian (parents) or court-appointed guardians. The guardians must fill the standard demat account opening form. Along with that, two KYC forms must be filled i.e. one for the minor and another for the guardian. The KYC form has to be signed by the guardian.

Let us now learn about the documents and details to be submitted for minor’s demat account

Documents and Details Required for Minor’s Demat Account

The guardian needs to submit the necessary documents like identity proof, address proof, passport size photograph, PAN card copy, etc. to the depository participant. The depository participant will verify the submitted documents and capture the minor’s PAN details in the DPM system after the verification. On successful processing of the documents, demat account for minor will be created.

There are some restrictions on a minor’s demat account in comparison to a regular demat account. In this section of the article, we shall learn about those restrictions.

Restrictions for a Minor’s Demat Account

  • The minor’s demat account cannot be used by the guardian to trade in certain segments like currency derivatives (F&O), equity derivative trading (F&O) and equity intraday.
  • A minor cannot be a joint holder to any joint demat account.
  • The minor’s account can be used only for purchasing or selling delivery shares.
  • The demat account of a minor cannot be linked to a trading account.

After learning about the restrictions on minor’s demat account, let us now learn about the procedure to be followed when the minor turns major.

Procedure To Be Followed When Minor Becomes Major

If the word “minor” is present during the time of account opening then the current account needs to be closed and a new demat account should be opened.

However, if the word “minor” was not present in the “Account Holders Name” then the following procedure must be followed;

  • New KYC application or details of KRA registration of the account holder must be submitted.
  • A new account opening form shall be submitted by the account holder.
  • The depository participant shall give an agreement copy consisting of the rights and duties of both parties to the account holder.
  • The details of the guardians shall be deleted and the account holder’s signature shall replace the guardian’s signature.

The above mentioned is the procedure to be followed when the minor turns 18 years of age i.e. turns into a major.

If you too are looking to invest in shares by opening a minor’s demat account, you may consider Kotak Securities. Their friendly and customer support staff shall assist you in completing all the formalities of the account. Moreover, by opening a demat account with them, you ensure yourself against any fraud in your demat account. Kotak Securities is known for its ethical working standards and it is the most reputed broking firm in India.

About the author / 

Robert B. Wilfong

Leave a reply

Your email address will not be published. Required fields are marked *

five + five =

POPULAR The most recent

  • Tips to Finding a Good Forex Broker

    One of the first things you need to address in Forex trading is what sort of money management rules you will employ. Forex trading is a risky business at the best of times. For this reason it is important to do everything possible to protect your investments and get qualified advice. One way of doing…

  • Digismart Credit Card: Features, Eligibility & Documents Required

    When cash transaction was hampering the lives of the people, credit cards helped them to the rescue. Now, the credit cards are provided with an all-new feature which helps people experience another level of convenience. With the launch of Digismart Credit Card, people can now shop, travel, dine, etc. with one single card. One can…

  • How Crawfort helps customers to fulfill their needs?

    Many people are there who all are very much interested in going for different things. But to get those, you need the money, and it is not an easy job to earn and spend money always. Singapore is a place where almost everything is expensive, and for that, it comes among the most expensive cities…

POST TAGS

LATEST COMMENTS

    Find Us on Flickr

      GET IN TOUCH

      Mortgage Advisor Help is article directory operate by Peter a blogger and the content writer. Have a flair for writing Advertising, Blogs for Business, Mortgage, Loans, Fame, Marketing, articles and want to have it read by readers who share the same passion and interests. Feel Free to contact for any Question using our Contact Form.

      Stay up-to date with the latest news and other stuffs, Sign Up today!