Financial literacy is very important in today’s world. Learning about savings, investments, etc. is essential. Saving is a habit that can’t be developed in a day; it takes time to save some of your money, and if kids learn this early, it will be beneficial for their future. Saving creates discipline in your child.
Why Demat Account Is Necessary?
According to a report, only 24% of India’s population is financially literate, which is very low when compared to the world. Your child’s Demat account can be used to grow and keep track of funds for their future education needs and other expenses.
They will also grow up with a greater awareness of saving and investing money. This financial literacy can be your child’s big competitive edge when he or she grows up. In India, close to 76% of people surveyed for a study showed a poor grasp of the basics of finance. In contrast to this, a child who grows up with an online Demat account has great financial literacy very early on in life.
How to Open Demat Account for Minors
There is no legal age requirement to open a Demat account. You just have to follow some simple steps, and some documents will be required.
- You need to visit the website of a stockbroker affiliated with CDSL or NSDL.
- The broker will then ask for some basic details like name, email ID, and phone number.
- In the next step, you have to provide the KYC of the child as well as that of the parent or guardian.
- The documents required will be the PAN cards of both the parent or guardian and the minor. AAdhar cards of both the parent or guardian and the minor
- The bank account of the parent or guardian will be required.
After submitting all these documents to a stockbroker, the stockbroker will proceed to open the minor’s demat account.
Limitation Of Minor Demat Account
- All the operations of the account will be controlled by its parents or guardians.
- They can’t open a trading account.
- They can sell stocks, but they cannot buy them.
- They can only receive stocks through gifts, donations, or transfers within the family.
- A minor cannot be a joint account holder in a demat account.
The minor demat account can change into a major demat account once the minor turns 18 years old. Contact your stockbroker to open your child’s demat account for a better future.
