Here’s what’s required for investing in bank FD and/or RD in a minor child’s name.
Pre-requisite: It is likely that you will be able to open your minor child’s account only at the bank where you already have a savings account. This is because most banks have this condition as a pre-requisite to opening a minor’s bank account. For example, HDFC bank’s website, on November 17, 2023, states that “You need to have a Savings Account in your name at the bank you intend to open the child’s Savings Account in.”Parents also need to comply with banking KYC regulations and submit copies of officially valid documents (OVD) in order to open a minor’s bank account. This is as per respective bank’s internal policies.
Documents required to open a/c for minor:
The documents required for opening a minor’s bank account vary from bank to bank. The RBI, in a circular titled ‘Opening of Bank Accounts in the Names of Minors’ on May 6, 2014, stated that: “Banks may, however, keeping in view their risk management systems, fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently. They can also decide, in their own discretion, as to what minimum documents are required for opening of accounts by minors.”
Type of bank account for minors: There are two types of bank accounts for minors. “Minor bank accounts can be opened in any one of two categories- for minors over 10 years (self-operated) and for minors below 10 years (operated by guardian). For both the categories, minor as well as guardian’s/parent’s KYC is required,” says Harikumar L, General Manager, Retail Banking Department, South Indian Bank.
The difference between the two types of minor bank accounts is who has the operational control over the account- the parent or the minor, and some bank-specific risk management controls. The documents required for KYC purposes for both types of accounts are the same.
For example, State Bank of India’s YONO mobile banking app for bank accounts opened for minors below 10 years of age will only offer viewing rights to the minor. Bank accounts opened for minors over 10 years of age will have both viewing and transacting rights (IMPS/UPI/etc.) in SBI’s mobile banking app.
“Banks are free to offer additional banking facilities like internet banking, ATM/ debit card, etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit,” said the Reserve Bank of India (RBI) in a circular titled ‘Opening of Bank Accounts in the Names of Minors’ on May 6, 2014.
Documents required for minor’s bank account by different banks
South Indian Bank (SIB): According to Harikumar L, “For opening a minor’s bank account guardian and minor have to give copies of their OVD. For minors OVD include valid Passport, Aadhaar and PAN/ Form 60. In case, the minor does not have a PAN, then the guardian has to fill in Form 60 on the minor’s behalf.”
“In case of minor self-operated bank accounts, guardian’s/parent’s declaration would be taken additionally. If the age and relationship of the minor cannot be ascertained with the provided OVD, birth certificate of the minor mentioning the name of the parent and date of birth may be insisted by banks,” he says.
“Only with birth certificate of the minor, we can open a small bank account in the name of the minor with limited transaction facility,” says Harikumar L.
This correspondent visited branches of 5 other banks as well to inquire about the documents needed to open a minor’s bank account. These include branches of Punjab National Bank, Indian Bank, Axis Bank, IDBI Bank and RBL Bank located in Sector 16 and Sector 18 in Noida, Uttar Pradesh. The minimum documents required for the aforementioned purpose are somewhat similar for 3 of these banks but PNB and Indian Bank’s requirements are different.
IDBI Bank officials said: “We have no issues on opening a minor’s bank account with only the birth certificate of the minor. Having an Aadhaar number of the minor is optional.”
RBL Bank officials said: “We can open a minor’s bank account with a birth certificate only. Having an Aadhaar is optional.”
Axis Bank officials said: “We can open a minor’s bank account with a birth certificate only. Having an Aadhaar is optional.”
Punjab National Bank (PNB) branch officials said: “As per our own internal policy we cannot open a minor’s savings bank account without the Aadhaar number of the minor. Having only the birth certificate of the minor will not suffice. For minors who do not have an Aadhaar they cannot open a minor’s savings account here.”
Indian Bank officials said: “We can open a minor’s bank account with a birth certificate but later it would be blocked due to KYC lapses. For unblocking the account Aadhaar of the minor is required. For minor children below 5 years age Aadhaar is not required for opening a minor savings account.”
For parents: Parents require any of the officially valid documents (OVD) like valid passport, PAN, or Aadhaar card, or valid driving license, or voter identity card issued by Election Commission of India, or Job card issued by NREGA duly signed by an officer of the state government, etc.
Regarding PAN of the minor
“A minor in India can apply for a PAN card. Practically, it is the responsibility of the parent or guardian to apply for and manage the minor’s PAN card. The parent or guardian can submit the application on behalf of the minor by providing the necessary documents, such as proof of identity, address, and birth documents, along with their own PAN card details,” says Akhil Chandna, Partner, Grant Thornton Bharat, a tax and business consultancy company.
- The savings account opening application form must be filled out with the minor as the first holder and the parent as a joint second holder if the minor is below 10 years of age. If the minor child is over 10 years of age, the bank account can be opened by the minor as a single holder also.
- A photograph of the parent is required. Some banks also insist on a photograph of the minor.
- If the minor child is over 10 years of age, banks will ask for uniform specimen signatures from the child. Otherwise, the parents’ signature would be required.
Things to know about bank accounts for minors
FD and RD: Both FDs and RDs can be opened through the minor’s bank account.
Debit card: Debit cards would only be issued to those minors who are aged above 10 years. Some banks print the photo of the minor on the debit card to personalize it whereas others only print the minor’s name on it.
Conversion from minor to major: When a minor becomes major, i.e., 18 years of age, fresh KYC documents are required to be submitted, and a formal conversion process must be completed. “When the minor becomes a major, the customer might get an SMS/E-mail, asking them to update their details with the bank. Either after receiving this SMS or on their own the parent and the minor need to give the bank fresh KYC documents of the minor (now major). Along with the documents, a minor to major conversion form needs to be filed where banks will capture the signature of the minor who is now an adult,” says Harikumar L.