A bank is a place where we keep our money for safety. This is possible only when we have a bank account, either in the form of a savings bank account or a fixed deposit account.
Irrespective of age and gender, anyone can have a bank account in their name. Likewise, a minor bank account is a bank account meant for minors. Banks offer these accounts to children of age below 18 who are basically school-going children.
Today, we are going to cover some of the basic requirements for opening a minor bank account. What document sets are required to get it opened in your child’s name? And most importantly, we will discuss the operational aspect of these minor bank accounts.
What is a Minor Bank Account?
This is a savings account designed specifically for children under 18 years old. If you have children, they can have their own separate bank accounts.
The facility is available in all the banks, it may be in public sector banks, private banks, or cooperative banks. You can choose where to bank at your convenience.
A minor bank account can have different product names in different banks, but the basic features are all the same as banks have to follow the guidelines issued by the Reserve Bank and other regulatory bodies.
A minor bank account has limited amount of transaction that can be performs as per the regulatory guidelines issued by the Reserve Bank. These may include lower transaction limits on Internet Banking, Mobile Banking and ATM transaction.
Documents needed to Open Minor Bank Account
Most banks in India offer minor bank accounts for children under the age of 18. Some of the popular banks you can explore to open a bank account for your kids are State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IDBI.
The document requirement can be classified as under.
| Minor below 10 years of age | Minor above 10 years and can sign uniformly |
| Adhaar card or School ID (Optional) | Adhaar card or School ID |
| Birth certificate of the child | Birth certificate of the child |
| Guardian’s KYC documents | Guardian’s KYC documents (Optional) |
Features of Minor Bank Account
Just like a regular savings bank account, a minor savings bank account has a number of inbuilt facilities that one gets while opening the account.
These facilities include-
- Fund Transfers
- Account Passbook
- Chequebooks
- ATM cards
- Internet banking
- SMS alert
- Has the facility to open other internal accounts such as fixed deposits, recurring deposits, Sukanya Samridhi Account, Public Provident Fund Account etc.
All these facilities come with limited usage, unlike normal savings bank accounts. Various banks capped limitations on these accounts to abide by the rules and regulations laid down by regulatory authorities like RBI.
How much Balance can you maintain?
It is possible for a minor to have a bank account balance of up to ₹10 lacs, which includes all internal accounts like fixed deposits and recurring deposits.
As a minor, it is important to understand that there is a prescribed limit for the amount of money you can have in your account. Going beyond this limit may prevent you from being able to withdraw or deposit funds.
Under minor savings bank account, a minor can have a maximum account balance of ₹10 lakhs only. The maximum amount is inclusive of all the accounts mapped with the primary account.
So, let us find out the rules you need to abide by to continue using your minor account smoothly.
- Make your account fully KYC compliant as per the bank’s guidelines.
- Make sure you do transactions every now and then. It means do not let your account mark as inoperative.
- Always abide by the terms and conditions of the minor accounts. That means the account balance at any point in time should be below the prescribed limit.
What to do When Minor Attains Majority?
In the normal course, it’s expected that the minor child will become an adult person. So, when he attains the majority, what should you do with the minor bank account?
As per the law, a minor become major at the age of 21 if the guardian is appointed by the Court, otherwise, he is deemed to be a major at the age of 18 under normal circumstances.
So, here’s what a minor has to do with his bank account when he attains majority.
| Serial No. | Process of Account Conversion from Minor Bank Account to Normal SB Account |
|---|---|
| 1 | Contact the bank when you attain the age of 18. Get the help of your parent if required. |
| 2 | Usually, the minor bank account is frozen when the minor become major. To unfreeze the bank account you have to visit the bank with the KYC documents. |
| 3 | Write an application to the bank and submit it with the KYC documents to the concerned official. |
| 4 | You must do a transaction on the same day to get the bank account to unfreeze and activate. |
| 5 | Apply for a fresh ATM card, and check if your Internet Banking is accessible or not. If not, you have to make a request to update the same. |
Can Minor Operate His Bank Account Alone?
The account mandate for account operation is simple in most banks. We have seen many banks that allow minors to operate their account on their own. In other cases, parents are given the sole authority to operate the bank account in favour of the minor.
As per the bank’s guidelines, it’s seen that for those minors whose age is below 10 years of age, the parent or the legal guardian operates the bank account in favour of the child.
And if the minor’s age is 10 years and above, and can sign uniformly then the bank allows the minor to operate the bank account on its own.
What if the Guardian Expires?
In the event of the death of the guardian before the minor attains the majority, the balance amount is payable to the minor upon his attaining majority. Until his majority, the court appoints an appointee to take in charge of the property.
The other possibility is that banks usually ask an appointee when opening a bank account. Or when a minor is appointed as a nominee of any account, the bank asks for an appointee to take in charge of the property in the event of the death of the primary account holder.
As such, the appointee becomes active in the event of the sudden demise of the account holder where a minor is appointed as a nominee.
Why can’t you deposit cash in the minor account?
As we have observed, there are limits to the amount of cash that can be deposited into a minor account, which varies depending on the type of account, whether it is single or jointly operated with a guardian.
The maximum limit is ₹1 or ₹2 lakhs. To ensure successful cash deposits, be mindful not to exceed the set transaction limit.
Secondly, Once the minor reaches the age of majority, the savings accounts will automatically transition to a Stop Account status.
Meaning, the minor bank account will be frozen at this point. This might be another reason why you can not deposit cash in the account successfully.
Last but not least, if you are unable to deposit money in the minor account. Check all the details you have provided in the bank are proper. It includes your KYC, whether the specimen signature is uploaded in the system or not. Or, is there any specific reason bank has assigned to the account for the ceasing of transactions?
Else your account should be alright.
Just keep in mind that the minor savings bank account has limitations on the number of transactions. It’s important to follow the terms and conditions outlined in the contract. Additionally, once a person becomes 18 years or older, the account will automatically be stopped.
It is advised to visit your bank at this time and ensure that all your details are up to date. You may be required to submit your KYC (Know Your Customer) document and provide a new signature, as requested by your bank.
For more details on KYC guidelines click here.
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