Opening of Demat account in a minor’s name

A Demat account can be opened in the name of a minor in order to hold investments across various securities which include Shares, Debentures and Mutual Funds.  A minor is an Individual who has not attained the age of 18.   The Formalities of opening the account and operating the same will be conducted by the guardian on behalf of the minor.  The guardian will be either the natural guardian ie., mother or father or a court-appointed guardian.  The procedures for opening an account in the name of a minor is similar to that of opening a regular demat account.

• The Standard account opening form has to be used for this purpose.
• The KYC formalities of establishing identity and address have to be completed for both the minor and the guardian.
• All the documents should be signed by the guardian.
• The date of birth of the minor has to be compulsorily provided and supported by documentary proof of age for account opening.
• The PAN cards of the minor as well as that of the guardian should be submitted.
• A demat account in the name of a minor cannot have a joint holder.
• The account can only hold the securities on delivery basis and cannot be used for intraday trades in equity, trading in equity derivatives and currency derivatives trading.
• In the event of the death of the guardian, a notarized copy of the death certificate has to be provided.
• The demat account of the minor will be then frozen till the documentation required to appoint a new guardian is complete.
• On attaining majority the erstwhile minor has to submit a new KYC and account opening form which otherwise should be completed in all respects.
• The account holder will be provided with a copy of the rights and obligations document and has to acknowledge receipt of the same.
• The guardian details will be deleted from the account and replaced by the demat account holder’s signature.
• If the word minor appears in the name under which the original account was opened, then the existing account has to be closed and a new account opened.
• The depository participant will transfer the holdings in the original demat account to the new account.