Minor Demat Account | Trading account for Minor
FREQUENTLY ASKED QUESTIONS ON
DEMAT/ TRADING ACCOUNT FOR MINOR
1. Can a demat account be opened for a minor?
Yes. Demat account can be opened in the name of a minor. The account will be
operated by a guardian till the minor becomes major. Guardian has to be the father
or in his absence mother. In absence of both, father or mother, the guardian can
be appointed by court.
2. Can minor be a joint holder in another demat account?
No. Minor cannot be a joint holder in a demat account.
3. Can a trading account be opened in the name of a minor?
Trading account can be opened in the name of the minor only for the sole purpose
of sale of securities which minor has possessed by way of investment in IPO,
inheritance, corporate action, off market transfers under the following reason:
i. Gift / Donation
ii. Transfer between family members
iii. Implementation of Government / Regulatory Directions or Orders
However, such an account will be operated by the natural guardian till the minor
becomes a major.
4. Can buying and selling of securities be done in minor’s trading account?
A minor cannot enter into a contract with a stock broker to purchase or sell any
security. However, a trading account in the name of a minor can be opened only
for the sole purpose of selling of securities possessed by the minor in the manner
specified above.
5. Whether the natural guardian and the minor are required to comply with
know your client (KYC) norms at the time of opening demat/ trading account
for the minor?
Yes. The guardian and the minor have to strictly comply with the applicable KYC
norms.
6. Can a minor’s demat/ trading account be continued when he/she becomes
major?
Yes. A minor’s demat/ trading account can be continued when the minor becomes
major. However, on attaining majority, the erstwhile minor should confirm the
balance in his/her account and he/she has to complete formalities as are required
for opening a demat/ trading account to continue in the same account/s.
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