GUARDIANS CAN OPEN DEMAT ACCOUNT FOR MINORS AND NOT TRADING ACCOUNT.

Points:

A Guardian can open a Demat account on behalf of a minor at RR Stock, invest in stocks in his own name (with own trading/demat account) and then make an off-market transfer of these securities to the minor’s Demat account as a gift.

Once a minor attains majority, he/she needs to submit a new KYC* or KRA* application form to be registered with RR Stock. The account holder will also have to submit a new account opening form duly complete in all respects. Subsequently the guardian’s details shall be deleted and the guardian’s signatures shall be replaced by the minor’s (now major) signatures.

The above procedure can be followed only if the word ‘minor’ is not present in the “Account Holder’s name” when the account was opened. If the word “minor” is present, then the existing account has to be closed and a new account has to be opened.

This also applies to mutual funds investments made directly from the stock exchanges. A minor cannot purchase mutual funds in his/her own name from the stock exchanges. The guardian has to invest in mutual funds and then make an off-market transfer into the minor's Demat account.

The below points have to be kept in mind while opening a minor’s Demat account with RR Stock –

  • i. The account opening form has to be filled by the guardian of the minor.
  • ii. In the KYC form, the guardian's photograph has to be attached along with the minor's photo.
  • iii. The Guardians KYC documents (i.e. ID proof, address proof) have to be submitted along with the minor's KYC documents.
  • iv. The minor's PAN card and the Birth certificate must be submitted.
  • v. The guardian's KYC form is required if the guardian's KYC has not been registered.
  • vi. Address proof of minor (account holder)
  • vii. Bank proof of minor (account holder)
  • viii. AMC* charges of Rs 200/- (An upfront AMC is required to be collected while opening a minor's account.
  • ix. A written letter/email confirmation required by the guardian for the reason of opening the minor's account.

Since a trading account will not be opened for a minor, s/he will not be able to buy or sell shares. Shares can only be transferred in and out of the minor's Demat account. For the transfer of shares, a CMR* will be generated and provided to the guardian.

To open a minor Demat account, you can call 011 23354802 / 080 23352497 and our sales representative will help you get the account opened.

KYC - Know Your Customer

KRA - KYC Registration Agency

AMC - Annual Maintenance Charge

CMR - Client Master report

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