Investing in your child’s future is a wise financial move, and one way to do this is by opening fixed deposits (FD) or recurring deposits (RD) in their name.
Parents can embark on this journey by establishing a bank account specifically for their minor child, even if the child does not possess a PAN card.
Here’s a comprehensive guide on the process and the necessary documents.
Setting the Foundation: Opening a Minor’s Account
To initiate investments in FD or RD for your child, start by opening a bank account in their name. This can only be done in a bank where you already hold a savings account.
Most banks have specific rules for establishing minor accounts, necessitating adherence to certain criteria.
Fulfilling KYC Requirements
The HDFC Bank emphasizes the importance of maintaining a savings account in the bank where you intend to open a minor’s account.
To proceed, parents must adhere to banking KYC rules, ensuring a smooth and compliant process.
Essential Documents for Minor Accounts
Document requirements may vary across banks, but generally, to open an account for a minor, you’ll need the child’s Aadhar card, parent’s Aadhar card, PAN card, and address proof.
Notably, in most banks, Aadhaar is a mandatory requirement for minors to open accounts.
Types of Minor Accounts
There are two main categories of bank accounts for minors: those for those above 10 years (self-operated) and those for those below 10 years (operated through parents or guardians).
KYC procedures for both categories involve documentation for both the minor and the parents.
Control Dynamics in Minor Accounts
The distinction between the two types lies in control dynamics.
Minors below 10 years typically have accounts operated by parents or guardians through platforms like the State Bank of India’s YONO mobile banking app.
In contrast, minors above 10 years often have the autonomy to view and transact through the bank’s mobile banking app.
Empower your child’s financial future by taking these steps to open FD or RD in their name, ensuring a secure and prosperous tomorrow.
