The stock market has emerged as an important destination for investment. There are many people in the new generation who prefer to park their money in shares instead of keeping it in banks.Â
The biggest reason for this is that the returns in the stock market are much higher than the savings account or FD of banks. However, sometimes people also face problems.
People lack information
For example, if you want to invest to secure the future of your children, then many easy and popular options will be available in banks or post offices. Be it Sukanya Samriddhi Yojana or many FD-RD options, one can find the means of investment as per the goal. In case of stock market, such specialized product is not available. However, you can easily invest in the stock market for your children. For this you just need to have information.
Demat account is most important
The most important thing to invest in the stock market is Demat account. Meaning, if you open a demat account for your child, then all your problems end here. So we just have to see whether we can open a demat account for children or not? If it can be done then what is its process?
Can be opened in this way
Demat account opened for children is called minor demat account. There is no minimum age limit for opening a minor demat account. This means that no matter how small your child is, you can invest in shares because the facility to open a demat account is available. The thing to note here is that minor demat account cannot be opened like a joint account, rather they have to be opened with a parent or guardian.
Documents required for Minor Demat Account
- PAN of parent or guardian.
- Address proof of parent or guardian. For this you can give Aadhaar, passport, driving license, voter ID etc.
- Child’s birth certificate. Bal Aadhaar, school transfer certificate or board mark sheet can also be used.
- The parent will have to complete the KYC process of SEBI. There should be no restrictions on the stock market on them.
- Bank account in the name of the child.
