Interested in teaching your kids about money management? Opening a bank account for them is a wise step towards financial responsibility. Our guide will take you through the process of opening a bank account for minors in India, covering age requirements and necessary documents.
The Context
Are you looking to instill financial literacy and teach your children about financial responsibility?
One effective way to do so is by opening a bank account for them, as it plays a crucial role in developing their financial discipline and preparing them for a successful future.
In this comprehensive guide, we will provide you with valuable insights and a step-by-step walkthrough of the process of opening a bank account for minors in India, ensuring that you have all the information you need.
The Considerations
When you’re opening a bank account for a minor, it’s important to keep in mind a few key considerations:
1. Age of Your Child
Banks usually provide two types of savings accounts for minors – one for children under 10 years old and another for children between 10 and 18. For younger children, the account needs to be operated jointly by a parent or guardian. Children aged 10 or older can operate the account independently.
2. Minimum Balance Requirement
Banks typically have a minimum quarterly balance requirement ranging from ₹1,000 to ₹10,000 for opening a minor’s account. It’s important to ensure that the minimum balance is manageable for you to avoid any future complications.
3. Spending Limits
Check with your chosen bank regarding the monthly and annual spending limits for the account. Different banks may have varying limits. Some banks may also impose daily withdrawal limits, such as ₹1,000 or ₹5,000. Additionally, inquire about the availability of a debit card and checkbook for the account and determine who has the authorization to operate them.
4. Funds Transfer
Confirm whether inter-bank funds transfers are allowed for the minor’s account. Also, check if the bank provides a “standing instructions” feature, which enables fund transfers from the parent’s account to the child’s account.
5. Communication Channels
Ensure that the bank offers clear communication regarding all transactions conducted through the minor account. Consider opting for SMS alerts to receive timely updates, and you may also request monthly e-statements via email for effective tracking and record-keeping purposes.
The Documents Requirements
To open a bank account for a minor in India, you will need to gather the following documents:
1. Identification Proof
Both the minor and the parent must provide valid identity proof, such as Aadhaar Card or Passport.
2. Recent Photographs
Recent photographs of the minor are required, and some banks may also request photographs of the parents.
3. Address Proof
You need to provide proof of the communication address. Documents like electricity bills, gas bills, or Aadhaar cards can be used as valid address proof.
4. Relationship Document
A document that demonstrates the relationship between the parent and the minor is necessary. Options include a Passport, Ration Card, or Life Insurance policies.
5. Date of Birth Proof
Proof of the minor’s date of birth must be provided, which can be done using a birth certificate or Aadhaar card.
Make sure to gather these documents before visiting the bank to ensure a smooth account opening process for your child.
The Process
Here is a step-by-step process for opening a savings account for a minor in India:
Step 1. If you do not already have an account with the bank where you intend to open your child’s account, start by opening a savings account for yourself.
Step 2. Fill out the bank’s provided form, specifying your child as the primary account holder and yourself as the joint account holder. Attach the required photographs along with the form.
Step 3. Submit the necessary identity proofs as specified by the bank. You may also need to provide PAN card details.
Step 4. Carefully review your application, ensuring that all signatures are in place and there are no errors or omissions, before submitting it to the bank.
Step 5. Once the bank receives your application, they will verify the information and initiate the account creation process.
Step 6. Once the account is established, the bank will provide you with all the relevant account documents. You may also receive a checkbook and a passbook for the account.
By following these six steps, you can successfully open a savings account for your minor child in India.
Conclusion
Opening a bank account for your minor child is an essential step in teaching them about financial management. Luckily, several banks offer specialized accounts for minors, such as-
≡ UNION MUSKAAN-Saving bank Account for minors
≡ Kotak Mahindra Bank’s My Junior Account
≡ IDBI Bank’s Power Kids account
≡ ICICI Bank’s Young Stars Account
≡ State Bank of India’s Pehla Kadam, and
≡ HDFC Bank’s Kids Advantage Account
These options provide convenient means for parents to initiate their child’s financial journey. Once the minor account is established and active, you can enjoy the flexibility of conducting transactions within the limits set by the bank.
It’s important to note that the account will remain active until the child turns 18, after which it will automatically become inactive. If you wish to make cash withdrawals, you’ll need to convert it into a regular savings account.
By taking the proactive step of opening a bank account for your child, you’re empowering them with valuable financial skills and building a strong foundation for their financial success in the future.
Thank you for investing your time in reading this article. We sincerely hope you found it informative and enjoyable.
