Minor Demat Account: How to Open a Stock Market Account for Your Child — Step-by-Step Guide

Updated: 18-06-2025, 01.59 PM

If you’re thinking of building a secure financial future for your child, there’s more to consider beyond traditional options like bank fixed deposits. With growing awareness of the stock market’s long-term potential, many parents today are exploring ways to invest in equities and mutual funds for their children’s future.

Minor Demat Account

One effective way to do this is by opening a Minor Demat Account — an account created in the child’s name, regulated by SEBI (Securities and Exchange Board of India). Through this, parents can gradually build a sizable fund in their child’s name by making strategic stock market investments.

Here’s what you need to know:

What Is a Minor Demat Account?

A Demat account is mandatory to trade in the stock market. Thanks to platforms like Zerodha and other online brokers, opening a Demat account for a minor is a simple and hassle-free process. You can complete most steps online, using just a few key documents.

There is no age limit to open a Minor Demat Account — it can be created at any time after birth. However, there are important conditions:

The account must be operated by the parent or legal guardian.
The child will gain independent trading rights only after turning 18.

What Documents Are Required?

To open a Minor Demat Account, you’ll need the following documents:

✅ Parent/Guardian’s PAN Card
✅ Parent/Guardian’s Address Proof (Aadhaar, Passport, Driving License, Voter ID, etc.)
✅ Child’s Birth Certificate (with parent’s names)
✅ Photographs of both the minor and the parent/guardian
✅ KYC compliance as per SEBI guidelines
✅ Relevant bank account details linked to the account

The account can be opened either online or offline by visiting a broker or stock trading platform.

How Does Trading Work?

There’s an important point to remember: You cannot directly trade stocks or mutual funds from a Minor Demat Account.

Here’s how it works:

Parents or guardians can buy shares or mutual funds from their own Demat account.
They can then transfer these assets as a gift to the child’s Minor Demat Account using the “Send as Gift” feature (offered by platforms like Zerodha).
Shares held in the child’s account can later be sold as required.

In this way, parents can gradually accumulate wealth for their child’s future education, marriage, or other goals — benefiting from the long-term returns of the stock market.

Why Open a Minor Demat Account?

✅ Long-term capital growth
✅ Teaches children about investing early
✅ Tax-efficient gifting of shares
✅ Suitable for building funds for future needs (education, marriage, etc.)

Final Word of Caution

As with any investment, stock market participation carries risk. Always conduct thorough research or consult a qualified financial advisor before making decisions. This article is for informational purposes only — Times Bull is not responsible for any financial gains or losses incurred through personal investments.

Author Profile

Kuldeep Singh Chundawat: My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.