Demat For a kid- There are two types of accounts for stock broking – trading and demat account. Trading accounts are used to buy and sell shares, ETFs, mutual funds and other securities. Demat account is used to hold securities purchased or gifted by others.
New Delhi. To invest in the stock market it is necessary to have a demat account. Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) manage demat accounts. Many companies and banks in the country including Zerodha, Angel One provide the facility of opening demat accounts. You can open Demat account online as well as offline. Demat account can also be opened for a minor. Here minor means a child or adolescent who is below 18 years of age.
There is no separate process for opening a demat account in the name of a minor. It can be opened in the same way as normal demat accounts are opened. Yes, in this you have to complete the KYC process, in which identity proof and address proof of the minor and the guardian have to be provided.
How to open account?
According to brokerage firm Zerodha, there is no age restriction for opening a demat account. Demat account of a minor can be opened online and offline. To open this account, along with the minor, his parents or guardian will also have to provide his documents. The account of a minor can be operated only by his parents or guardian until he attains majority.
A minor cannot do this work
The thing to be noted here is that a demat account will be opened in the name of a minor, but the account is not allowed for intraday trading in equity, equity derivatives and currency derivatives. A minor cannot buy securities himself, but securities can be transferred to him. Securities can also be gifted to him.
These documents will be needed
To open online demat account for minor, minor’s PAN, Aadhaar number, proof of date of birth, photograph, copy of canceled check or bank statement of minor’s bank account, legal guardian letter, if the guardian is other than the parents of the minor. Someone else and address proof of the guardian.
Open account online like this
Many brokerage firms provide the facility to open demat account online. Here we are explaining step-by-step the process of opening a demat account of a minor through brokerage firm Zerodha.
- Go to signup.zerodha.com/minor and log in using the parent’s Zerodha account credentials.
- Verify the parent profile details and click on Continue.
- Enter mobile number and email ID and verify using OTP.
- Enter PAN and date of birth of the minor and click on Continue.
- On the DigiLocker page, enter the Aadhaar number of the minor and click on Next. Enter the received OTP and submit.
- Enter the minor’s bank account details, select the Terms and Conditions check box and click Continue.
- Click on Proceed for in-person verification. It is necessary for both the minor and the guardian to be present during IPV.
- Now upload the required documents as mentioned and click on Continue.
- Add nominee. (This is optional).
- E-sign using guardian’s Aadhaar.
- Once the account opening process is completed, the account will be opened within 48 working hours and login credentials will be sent to the registered email ID.
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