What is the Age limit for Demat Account?

In this fast-moving smart world, students and teenagers are fascinated by the success stories of some big-time investors. And they are driven to venture into the stock market.

We all know that trading is not possible without a Demat account, but they might get stuck by the question of the age limit for a Demat account.

Contrary to what most people may assume, you don’t have to be 18 years old to open a free Demat account online. There is no minimum age to open a Demat account online. A minor and an adult can invest in the stock market.

With that being said, SEBI had set rules to follow strictly. There are conditions and some trading restrictions for a minor Demat account.

The parents or guardians should open the minor Demat account. After submitting the respective documents, the minor online Demat account will be opened. The parents or the guardian should supervise the account until the minor attains adulthood.

Trading in a minor Demat account differs slightly from trading in an adult’s account. We can only use the Demat account for selling securities possessed by the way of investment in IPO, inheritance, or corporate action.

A minor after turning 18, the DP will send an advisory to the individual to obtain KYC (know your client) documents to open and transfer the shares to a new account.

How to open a Demat account online:

  • Step 1- Select a Depository participant to open the account with. The depository helps you to open a beneficial owner (BO) account.
  • Step 2- Fill in all the details required in the account opening form together with the documents copies of proof of address, proof of identity, proof of income, etc
  • Step 3- Know about the charges that should be paid with your DP. An in-person verification will take place to confirm the details provided
  • Step 4- Upon successful verification, your online Demat account is opened and operational.


PAN and KYC details:

A PAN card is mandatory to open a Demat account online. You have to submit a copy of your PAN card attached to the KYC document.

Documents required to open a Demat account online:
Following are the documents required to open a Demat account online for an adult.

  • PAN card
  • Aadhar card
  • Income proof
  • Bank account details
  • Copies of Photographs
  • Signature

However, to open a minor Demat account online, besides the above-mentioned documents, the parents or guardians must submit their PAN card at the time of the account opening process.

Also, SEBI has forbidden adding a minor as a joint Demat account holder. Therefore, all the Demat account holders must be above 18 years of age.

After turning 18, the minor Demat account holder can continue to trade as a major. The minor has to verify the balance in the account and refurnish the documents mentioned above.

Charges:

There are different ranges of fees collected by the broker, from taxes levied by SEBI to operational charges. The charges may differ from broker to broker.

Consolidation:

You can merge different portfolios of the same company to create a new portfolio. You should forward the physical certificates with a letter duly signed seeking consolidation from the RSTA of the particular company.

Account freezing:

With Demat accounts, there is a feature that allows you to freeze your account, securities, and even any number of shares of a specific period.

Conclusion:

In a booming economy, trading in the stock market is the best place to start investing. 

Regardless of age, anyone interested in investing can open a Demat account online and start trading by submitting the necessary documents.

Your brokerage will verify the documents provided and execute the process of opening an account. Finally, a client ID is generated to give access to your Demat account.

Hope this article about the age limit for the Demat account is helpful.