How to open a bank account for a minor?

If you have been thinking about teaching your child the value of money and how to save it, one way to do that is by opening a bank account for a minor. You know it will help them understand financial responsibility, but you are not sure how to go about it. Where do you start? What documents are needed, and what type of account should you choose? Worry not; this article will help you understand everything you need to know about a minor bank account.

Procedure to open a bank account for minors

Opening a bank account for your child is a significant step towards teaching them about financial responsibility, savings, and the basics of banking. The response to common queries, "How can a minor open a bank account?" and "Can a minor have a bank account," is a clear yes. Here's the streamlined process to get started:

Eligibility and documentation for opening a bank account for a minor

• Age: The minor must be below 18 years of age.
• Guardian: The account must be operated by a parent or legal guardian if the minor is below 10 years old. For minors aged 10 and above, they can operate the account independently with the guardian’s consent.
• Existing account: The parent or guardian must have an existing Savings Account with Axis Bank.
• Minor’s documents:
• Birth Certificate: Proof of the minor’s date of birth.
• Photograph: Recent passport-sized photograph.
• School ID:If available, for school-going children.
• Passport: If available, as an additional identity proof.
• Guardian’s documents:
• Identity proof: Voter ID, Passport, PAN card, etc.
• Address proof: Utility bill, Aadhaar card, etc.

Opening a bank account offline

Venturing into a bank branch to open a minor's account offers a tangible step towards financial education, allowing for a personalised interaction with banking professionals.

1. Select a suitable bank and account type: Research and choose a bank that offers accounts designed for minors, such as a minor's Savings Account or a custodial account. Consider features such as no minimum balance, interest rates, and online banking facilities.

2. Gather required documents: Get the necessary documents ready, including identification and proof of address for both - parent or guardian and the minor. This typically includes the minor's birth certificate or student ID and the guardian's government-issued ID.

3. Visit the bank branch: With the documents, visit your chosen bank's nearest branch. It's a good opportunity to introduce your child to the concept of banking.

4. Fill out application forms: A bank representative will provide you with the necessary forms to open the account. Fill these out carefully, ensuring all information is accurate and complete.

5. Submit KYC documentation: Along with the application forms, submit the required KYC documents for both, the guardian and the minor.

6. Make the initial deposit: Many minor accounts require an initial deposit. Check in advance the minimum amount required and deposit to activate the account.

7. Set up account features: Discuss with the bank representative any additional features you want to include, such as internet banking, a debit card, and withdrawal limits.

8. Receive account details: Once the account is opened, you'll receive account details, including account numbers and online banking credentials. Make sure to keep these secure.

Opening a bank account online

Embrace the convenience of the digital age by opening your minor's bank account online, a process that can be done from anywhere. Read on to know how to open a bank account online for a minor.

1. Research online eligible accounts: Start by identifying which banks offer the ability to open minor accounts online. Look for banks with user-friendly platforms and robust security measures.

2. Prepare digital copies of documents: Before starting the application process, prepare scanned copies or clear photos of all required documents, including IDs and address proofs for both, you and your minor.

3. Complete the online application: Navigate to the bank's website or app and complete the application form. Input all requested details accurately to avoid any processing delays.

4. Upload KYC documents: When prompted, upload the digital copies of your KYC documents. Ensure the files are clear and all details are legible.

5. E-Verification process: Some banks may require an e-verification step, such as a video call. Be prepared to show the original documents on camera for verification purposes.

6. Fund your account: Similar to the offline process, you'll likely need to make an initial deposit digitally. Follow the bank's instructions for transferring funds to the new account.

7. Activation and access: Upon successful verification and deposit, the bank will activate the account. You'll receive an email or SMS with account details and instructions on how to set up online banking access.

KYC documents for minors

KYC, or Know Your Customer, is a critical regulatory requirement to prevent identity theft, financial fraud, and money laundering. For minor below documents are needed:

• Birth certificate: A primary document that verifies the minor’s age and nationality.
• School ID: For school-going children, a valid school identification card can serve as proof of identity.
• Passport: If available, a minor's passport is a universally accepted identification document.
• Aadhaar card: In jurisdictions where applicable, the minor's Aadhaar card (or similar national identity card) can be used for KYC purposes.
• Photograph: Recent passport-sized photographs of the minor are required for identity verification and account opening documentation.

KYC documents for the parents

Gathering the necessary KYC documents of the parents is a foundational step in establishing a minor's bank account, ensuring compliance and trust in the banking relationship.

• Proof of identity: Valid government-issued ID documents such as a passport, driving licence, or Aadhaar card.
• Proof of address: Recent utility bills, property tax receipts, or any official document bearing the guardian's name and address.
• Photographs: Passport-sized photos of both, the guardian and the minor may be required for identification purposes.

Conclusion

Opening a bank account for a minor is not just about giving them a place to keep their money. It's about starting their journey in financial literacy, understanding the value of money, and learning to save and manage their funds responsibly.

Axis Bank's Future Stars Savings Account is an account for minors that offers an array of benefits. It proffers an interest rate of 3.0%-3.5% on daily balances, a protective personal accident insurance cover of ₹2 Lakh, and the empowerment that comes with a Visa Platinum Debit Card. at a nominal fee. Particularly appealing is the option for a personalised card for those over 10, making banking relatable and exciting for young minds. With manageable opening deposits and a focus on inculcating saving habits early, this account is a solid foundation for any minor's financial journey.

Also Read: Types of Savings Accounts: Know them all

FAQs

Is it always necessary for parents to visit a branch for opening a new account for their kids?

Not always. Many banks now offer online account opening processes, especially how to open a bank account online for minors, making it convenient to open an account from anywhere.

Do all minor bank accounts have the same features?

No, banks offer various accounts like minor bank accounts, custodial accounts, and joint accounts with a guardian, each with different features and benefits tailored for young savers.

Do all minor bank accounts have the same interest rate?

Interest rates for minor bank accounts can differ based on the account type and the bank's offerings. Axis Bank, for instance, provides 3-3.5% interest on daily balances, which is calculated quarterly, to encourage the habit of saving among young account holders.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.