The Reserve Bank of India (RBI) has made a big announcement. Children who are 10 years or older can now open and manage their own bank accounts.
This means they can have savings and term deposit accounts in their own name.
They will also be able to use facilities like ATMs and internet banking. This news was shared by the news agency PTI.
Earlier, Only Parents or Guardians Could Operate Minors’ Accounts
Earlier, bank accounts for minors could only be managed by parents or legal guardians.
But with this new rule, children above the age of 10 will have more financial independence and can handle their own bank accounts.
What Types of Accounts Can Minors Open?
According to the RBI, minors who are 10 years or older can now independently open and manage savings accounts and term deposit accounts. However, this will depend on each bank’s risk management policy.
Banks will also decide how much access to provide and under what conditions. The bank will clearly explain these terms and conditions to the young account holders.
What Happens When the Minor Turns 18?
Banks must make sure that there is no overdraft allowed on minor accounts, and the account should always have money in it.
Banks are also responsible for properly verifying the minor before opening the account.
Once the account holder turns 18 years old, they must submit a new signature and operating instructions to the bank to continue using the account as an adult.
What Banking Facilities Can Be Given to Children?
The RBI said that banks may offer minors additional services such as:
Internet banking
ATM or debit card
Cheque book
However, these services will be given based on the bank’s policies and the child’s understanding of how to use them.
The RBI has instructed all banks to either create new policies or update existing ones to follow these new rules by July 1, 2025.
What About Children Below 10 Years?
Even children under 10 years can have a bank account. But in such cases, the account must be opened and operated only through a parent or legal guardian.
The RBI has also made it clear in the circular that in these cases, the mother will also be considered a legal guardian.
