Have you heard, “wait for the right age”? But does your stock market journey also has to wait till the time you attain the perfect age? Is there any chance of having a demat account for minors?
Before answering all these questions, it is important to know that you need a demat account if you want to invest in the stock market. No matter what investment segment or product you choose in the stock market, you need to choose a stockbroker and open a Demat account.
Let us now talk about the Demat account for minors.
Can I Open Demat Account for Minor
Now circling back to the initial question that we posed, can we open a Minor Demat account? The answer is Yes. A stock market is a great option for everyone looking for some great investment options and this benefit is not kept aloof from the minors as well.
“I made my first investment at 11, I was wasting my time until then” – Warren Buffet
It is always good to start early and as there is no age limit for demat account, you can build a good investment for your future even before you get the right to vote.
You can pick a stockbroker and open a minor Demat account. There are some things that one should keep in mind when opening a minor Demat account.
- A minor Demat account has to be operated by a guardian or a parent, till the time the individual attains the age of 18. After the age of 18, the minor Demat account can be changed to a regular Demat account and available for trading post that.
Working along these lines, a minor can easily start their investment career very early in life and build a good portfolio over time.
Whenever you open a bank account, you need some documents for verification. Similar is the case with a Demat account as well. Just like there are some documents required for Demat account for a major, there are some specific documents required for a minor Demat account as well.
You can keep these documents handy to make your account opening journey a smooth experience.
- Proof of Identity– This is an essential document as it lets the stockbrokers verify the details of an individual. You can use various documents for this purpose.
- PAN Card of the minor
- PAN Card of the guardian
- Birth certificate or any age proof
- Photograph of the minor
- Photograph of the guardian
- Proof of address- There are various documents that a minor can produce as proof of address.
- Aadhar card of the minor
- Aadhar card of the parent/guardian
- Any utility bills (electricity bill, water bill, etc)
- Ration card
- Passbook of the minor
- Income Proof- If you want to trade in the derivatives segment, then you need to generate income proof. But what in the case of a minor?
A minor cannot trade in the derivatives segment and hence there is no need of income proof.
But the parents of the minor still have to generate some proof for the bank account details. For that, you can produce a bank passbook of the guardian/parent and even a cancelled cheque.
Once you have these documents handy, you can easily open a minor demat account.
How to Open Demat Account For Minors
There are various stockbrokers in the industry that allow minors to open a Demat account. If you are looking to get a minor Demat account, you first need to choose the right stockbroker. You can analyze the charges, brokerage, services, and other factors and then choose wisely.
The demat account opening in the case of minors is also similar to a regular demat account, but the only difference here is that you have to submit the documents of the parent as well as the minor.
- You need to fill the account opening form provided by your stockbroker either offline or online.
- Submit the KYC documents of the parents as well as the child.
- Complete the verification and once it is successfully completed, the account will get activated.
You can easily open a demat account with Choice in some simple steps and start your stock market journey.
Now wherever you open a demat account, you have to keep a close look at the charges also. Various different brokers levy different charges for a demat account. In the earlier times, every stockbroker used to charge some opening charges but lately, the trend has changed.
These days a lot of stockbrokers have started providing their customers a free demat account. Apart from the opening charges, the stockbroker also levies some maintenance charges on their demat accounts.
You have to pay these charges either annually, quarterly or monthly. Choice gives you a chance to open a free Demat account and enjoy a wide variety of services.
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Not only this, but you also get a chance to choose from three different AMC plans, ranging from ₹200- ₹3000.
You don’t have to pay AMC in the first year and it is only from the second year onwards that you will be charged an AMC.
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These are the various Demat account charges that will be levied on your minor Demat account.
No worries even if you are not 18 yet and want to invest in the stock market because you can absolutely do so. Although you can only invest and not trade, it still gives you an opportunity to start your investment journey early and keep them in complete sync with your long-term financial goals.
So why are you waiting? Open Demat account today, and start investing!