Complete Guide to Zerodha Minor Account Opening

Shockingly, schools don't teach us about money. As a result, only 16.7% of teenagers know how to handle money matters. That's a big problem! But you can change that for your child.

Start early by teaching them about money management. One great way to do this is by opening a minor account with a broker. This not only helps them learn but also gives them a head start in financial literacy.

Setting up minor accounts is super easy. You just have to make sure that the broker you choose offers them. One such broker is Zerodha. So, let's explore how you can open an account with it and set your child on the path to financial literacy!

Table of Contents

• What is a Minor Demat Account?
• Account Restrictions for Minors
• Documents Required for Minor Account Opening
• How to Open a Zerodha Minor Demat Account?
• Fees and Charges for Minor Account Opening
• Why Choose Zerodha for Minor Accounts?

What is a Minor Demat Account?

It is a special investment account designed just for kids under 18. It allows them to hold and trade securities electronically, just like adults do. But there's a catch: minors can't operate the account on their own. Instead, a parent or guardian manages it until they turn 18.

This account is great for teaching kids about investing early on. They can explore stocks, Mutual Funds, and bonds, helping them understand money management. Plus, it's a smart way to benefit from compounding returns over time. It's a simple process; all you'll need are documents like the minor's birth certificate and the guardian's ID. Once set up, your child can start their investment journey under your supervision.

A step-by-step guide to opening a Demat account with top stock brokers in India.

Account Restrictions for Minors

When it comes to Minor Demat Accounts, there are some important restrictions to keep in mind. Here's a quick rundown of what you need to know:

• Guardian Required: A minor cannot operate the account alone. A parent or legal guardian must manage it until the child turns 18.
• No Buying: Minors cannot buy shares or government securities directly. They can only hold them if gifted or transferred to their account.
• Withdrawal Limits: The guardian can set limits on how much money can be withdrawn, helping prevent any financial mishaps.
• Trading Restrictions: No intraday or Futures and Options orders allowed. Minors can only sell holdings from their Demat account.
• Participation Restrictions: Minors are not permitted to participate in the Offer for Sale (OFS).
• Investment Opportunities: They can apply for IPOs, buybacks, and takeovers, but they must follow the rules set by the broker.
• No Joint Holdings: They are not allowed to be joint holders in any Demat account, further limiting their ability to participate in the stock market.

If you're thinking about opening a Minor Demat Account, just remember these restrictions to help your child learn about investing responsibly.

Documents Required for Minor Account Opening

Opening a Minor Demat Account is simple, but you need to gather some important documents first. Here's a quick checklist to help you out:

• PAN Cards: Digital copies of the minor's and guardian's PAN cards.
• Aadhaar Number: Minor's Aadhaar number for OTP verification.
• Date of Birth Proof: A digital copy of the minor's DOB proof, such as a birth certificate or passport.
• Photograph: A digital copy of the minor's passport-size photograph.
• Bank Account Proof: A digital copy of the minor's bank accounts details like a cancelled cheque, bank statement, or passbook.
• Legal Guardian Letter: Required if the guardian is not a parent.
• Address Proof: A digital copy of the guardian's address proof, such as a passport, masked Aadhaar, driver's license, or voter ID. 
• Signature: A scanned digital copy of the guardian's signature.

Once you have these documents ready, you can easily open a Minor Demat Account.

How to Open a Zerodha Minor Demat Account?

You can open a Minor Demat Account easily with Zerodha online or offline. However, it is only possible if the guardian has a Zerodha account as well. Just follow these simple steps:

Steps to Open a Minor Demat Account Online

1. Visit the Website: Go to signup.zerodha.com/minor and log in using the guardian's Zerodha account details.
2. Verify Details: Check the guardian's profile information and click on "Continue". If you need to update anything, do that first.
3. Contact Info: Enter a mobile number and email ID that isn't linked to any other Zerodha account. Verify them with an OTP.
4. Enter Info: Input the minor's PAN and date of birth, then click on "Continue".
5. DigiLocker Step: On the DigiLocker page, enter the minor's Aadhaar number. Click Next and submit the OTP you receive.
6. Bank Details: Enter the minor's bank account information, agree to the terms, and click "Continue".
7. In-Person Verification (IPV): Both the minor and guardian must be present for this step.
8. Upload Documents: Upload all required documents and hit Continue.
9. Nominees: You can add nominees if you wish.
10. eSign: Use the guardian's Aadhaar for e-signing.

Once everything is submitted, your account will be set up within 48 working hours, and login details will be sent to your email.

Also, check the Zerodha account opening charges, brokerage charges and procedure to open a demat account.

Steps to Open a Minor Demat Account Offline

1. Guardian's Signature: The guardian must sign all forms and supporting documents for the minor.
2. Application Forms: Submit the equity application form (PDF), KYC application form (PDF) for the guardian, and CKYC form (PDF) for the minor.
3. PAN Documents: Provide a copy of the minor's PAN attested by the guardian and a self-attested copy of the guardian's PAN.
4. Date of Birth Proof: Submit a copy of the minor's DOB proof, such as a birth certificate, school leaving certificate, passport, or mark sheet.
5. Photographs: Provide passport-size photographs of both the minor and the guardian.
6. Bank Proof: Submit a copy of the minor’s bank account details, such as a cancelled cheque, recent bank statement, or passbook.
7. Legal Guardian Letter: Submit a legal guardian letter if the guardian is not a parent.
8. Address Proof: Provide address proof for both the minor and the guardian, such as a passport, masked Aadhaar, driver’s license, or voter ID.
9. Contact Information: Provide a mobile number and email ID for the guardian or one that is not linked to any other Zerodha account.
10. KYC Verification: If the KYC of both the guardian and the minor is verified, PAN and address proofs are not required.
11. IPV: Both the guardian and the minor must be present for IPV.

Email soft copies of the required forms to forms@zerodha.com for review and then courier the documents to Zerodha at their office in Bengaluru. The account opening process takes up to 72 working hours after submission.

Fees and Charges for Minor Account Opening

Opening a Minor Demat Account with Zerodha comes with some fantastic benefits when it comes to fees. Here's what you need to know:

• Account Opening Fee: It's completely free! You won't pay anything to set up the account.
• Annual Maintenance Charges (AMC): Guess what? There are no AMC fees for minor accounts. This means you won't be charged yearly for keeping the account active.
• Trading Costs: For equity delivery and Mutual Funds, trading is also free! However, if you engage in intraday trading or Futures and Options, there's a flat fee of ₹20 per trade.

This makes Zerodha a viable option for parents wanting to teach their kids about investing without worrying about extra costs. With zero opening fees and no annual charges, it's a win-win for young investors! 

In Conclusion, Why Choose Zerodha for Minor Accounts?

Choosing Zerodha for a Minor Demat Account is a smart move! First off, it's completely free to open and maintain. That means no hidden fees are eating into your child's investments. Plus, Zerodha offers a user-friendly platform that makes investing easy for young learners.

The account setup process is simple and quick, allowing you to get started in no time. Plus, the lack of annual maintenance charges means you can focus on teaching your child about money without worrying about extra costs.
Additionally, Zerodha provides excellent educational resources to help young investors learn the ropes. This combination of affordability and accessibility makes it an ideal choice for parents looking to nurture financial literacy in their kids.

Also read:

• Guide to Checking Your Demat Account Status
• Zerodha Complete Review