As a parent, you want the best future for your child. One way to secure their financial future is by opening a Minor Demat Account. A demat account is a digital account that holds securities and shares in electronic format. Here are some reasons why opening a Minor Demat Account can benefit your child’s future. Check how to make demat account:
Investing in Their Future
Opening a Minor Demat Account allows you to invest in your child’s future. You can invest in stocks, mutual funds, and other financial instruments that provide long-term returns. This can help you build a corpus for your child’s future education or other financial needs. Later you can open trading account online.
Investing in a Minor Demat Account allows you to build long-term savings for your child. By investing regularly, you can build a sizable corpus that can help you meet your child’s financial needs in the future. This is when you know how to make demat account.
Investing in a Minor Demat Account can also provide tax benefits. As a parent, you can claim a tax deduction of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. Additionally, any income earned from investments in the account is tax-free up to Rs. 1,500 per year.
Minor Demat Accounts can be controlled through online platforms. You can monitor account performance, view investments, and make transactions from the comfort of your home or office. This is while considering to open trading account online.
Transfer of ownership
When your child turns 18, ownership of the Minor Demat Account can be transferred. This allows them to take control of their investments and manage their financial future.
Education and financial literacy
Opening a Minor Demat Account can also help you educate your child about finance and investments. This can help them develop sound financial habits and become financially literate while considering the idea of setting up a demat account.
How to Open a Minor Demat Account
Opening a Minor Demat Account is simple. Here are the steps to check how to make demat account:
Choose a deposit participant
You can choose a Depository Participant (DP) that offers Minor Demat Accounts. Some popular DPs in India include NSDL and CDSL.
Fill out the Application Form
Fill out the application form with your child’s name as the account holder and your name as the guardian.
Submit the required documents.
You will need to submit documents such as your child’s birth certificate, PAN card, and proof of identity and address.
Fund the account.
Fund the account by transferring funds from your bank account to the Minor Demat Account.
Once the account is opened and funded, you can invest in stocks, mutual funds, and other financial instruments.
Opening a Minor Demat Account can secure your child’s financial future. By investing in long-term savings, you can build a corpus that can help you meet your child’s future financial needs and then you can open an online trading account for him or her.