With the faster-than-previous growth rate of the Indian economy, more money is being invested in the capital markets by both domestic and international investors. Additionally, much like adults, children are attracted to the gains that come with the market's expansion.
To open a minor Demat account, read the article below to understand the steps.
Steps to Open a Minor Demat Account Online
Opening a minor Demat account online does not require a minimum age, but there are a few organised steps you must take. opening a minor demat account online
Step 1. A minor cannot independently open a minor Demat account. The stockbroker will need documents from the parent or legal guardian to open a minor Demat account.
Step 2. Only the minor Demat account can be used by a minor to deal in equities delivery. Minors are not permitted to participate in stock or currency derivatives or intraday equity trading.
Step 3. A minor's Demat account cannot be linked to an online trading account. Thus, a minor is not permitted to have a minor trading account.
The following paperwork is needed to open a minor Demat account:
- Proof of identity (PAN card) for the minor and their parent or guardian.
- The Aadhar card, which serves as proof of address for both the minor and their parent or guardian.
- The minor's birth certificate.
- The parent or guardian's bank account information.
Benefits of Minor Demat Account
In addition to a quick online account opening process, a Minor Demat account comes with the following advantages:
- Better financial planning: Compared to other investment tools, mutual funds and equities stocks often yield larger returns. By opening a minor Demat account, parents and guardians can better manage their children's finances. You can therefore use this account to save money for weddings, education fees for your kids, moving for a job, and other events.
- Encourages Financial Literacy: By opening a small Demat account, children are exposed to the concept of financial independence. As kids get more and more fascinated with the details of the stock market, they acquire vital life skills required to succeed in the real world.
Conclusion
You can grow and monitor money for your child's future educational demands and other expenses by using their Demat account. Additionally, they will become more conscious of investing and saving money as they become older. When your child grows up, this financial literacy may give him or her a significant competitive advantage. Visit the Value Broking financial educational portal to understand more about minor Demat accounts and stock trading.
