How to Open Demat Account for Minor?

 

How to Open Demat Account for Minor?

Many of you may don’t know one secret of Rich people in India especially Gujarat. Well, in Gujarat all the Rich families (And I am sure that in other states of India also this is the tradition) open the demat accounts for their children in their very young age sometimes just after birth.

This is because Rich people understand the importance of early investing. They start building equity portfolio for their children since their childhood and that’s why when they become adult, they have a huge portfolio income (passive income) and they can fulfill all of their dreams from this wealth. Here are some rules to open a Demat account in the name of Minors in India.

1.Demat accounts can be opened in the name of a minor child by the natural guardian (parents) or court-appointed guardians only.
2. The guardian needs to fulfil all requirements for documents and KYC norms to open the account in the name of the minor.
3. A minor cannot be a joint holder in a demat account. The demat account can be held only in the name of the minor.
4. Date of birth of the minor is mandatorily required, with proof. The account becomes inoperative when the minor turns major.
5. On attaining major status, a new demat account needs to be opened after completing all documentation. The erstwhile
holdings can then be transferred to the new account.
6. If shares are held jointly with a minor in paper form, they need to first be transferred to the minor and then to the demat account in the minor's name.