Age Limit For Demat Account

Often students and teenagers find themselves driven to the stock market world. Most of them are fascinated by the typical ‘rags to riches story of some big-time investor. And somewhere in their minds, they plan to venture into the stock market but what might stop them is the question of the demat account age limit.

As you might know, no trading is possible without a Demat account. Hence the first thing ever stock market nerdy teen or a student will need is a Demat account.

Regrading the age to open a Demat account, SEBI had set some rules that must be strictly followed. What do these rules say about the demat account age limit?

Minimum Age To Open Demat Account In India

Assumptions can be dangerous, or as in this case highly misleading. We are referring to this common belief among Indians that one needs to be an adult i.e. above the age of 18 years to invest in the stock market. This is completely untrue.

The 1872 Indian Contracts Act restricts individuals under the age of majority from entering into or engaging in financial contracts.
Likewise, there is no such Demat account opening age limit. Hence, it’s safe to say that regardless of age, Demat account opening online is totally possible.

But there are certain conditions to avail this facility. And there are some trading restrictions too in case of a minor Demat account opening online.

Firstly, to open a minor Demat account, parents or a guardian must supervise all the proceedings. And once a minor Demat account is opened, then the thing to keep in mind is that the trading with such an account is different from that of a normal trading account.

SEBI has directed that a minor Demat account can only be used for selling securities as possessed by the way of investment in IPO, inheritance or corporate action, And even all these tradings must be supervised by an adult.

Documents Required for Demat Account Opening

For a regular Demat account i.e. an account opened by an adult, the documents required for online Demat account opening are as follows:

• PAN Card
• Aadhaar Card
• Income Proof
• Bank Account Details
• Photographs
• Signature

But if you wish to open a minor Demat account then in addition to the above documents that certify the minor’s age, it is required that parents or guardians will have to furnish their PAN card at the time of the Demat account opening process.

Another thing to note for those who wish to open a minor Demat account; SEBI has forbidden from adding a minor as a joint Demat account holder. Therefore to complete the procedure to open a joint Demat account, all holders will have to be above 18 years of age.

Now one last question that arises here is:
What happens when a minor Demat account attains the age of 18?

Well, then the minor Demat account holder can continue trading as a major. The procedure to be followed is that the minor will have to verify the balance in the account and refurnish the documents mentioned above. That’s all.

Conclusion

Hope this concept of the age limit for the Demat account is clearer. It is better to not pay much attention to misleading information surrounding this topic on the web.

All beginner-level investors can follow this blog regularly to never fall for misinformation.

And, if you are an investor who is about to venture into the stock market then you can open a Demat account with Choice right away.

FAQ

Is there any pan card age limit?

Is it possible to obtain a PAN Card prior to turning 18? If the individual is a minor (below 18 years old), parents have the option to submit an application for a PAN card on their behalf. Notably, there exists no upper age limit for initiating the PAN card application process.