Financial 'to do' list for when your child turns 18

Parents open bank accounts for and make investments for their children. The guardian operates the account till the child turns 18, after which the account can only be operated by the now major. MF folios are also frozen for updating the minor turned major’s details.

Law
Minors can’t sign papers, enter into contracts, or issue third party cheques. On turning 18, they can do such transactions, once their signature is attested by the bank.


Form
Banks and AMCs need a form to be filled by the new major to update records. Specimen signatures of the child has to be provided. The guardian must also sign the form.

Documents
For bank accounts, a new account opening form needs to be filled. Latest KYC documents should be attached with the application. The verification of age is done with proof of birth date.

In-person verification
Banks may insist on personal verification of the minor-turned-major. He or she may have to be personally present at the branch to sign and to carry out requisite paperwork.

Change in mandate
The mode of operation of the account can be changed by the minor-turned-major. This change of mandate form also needs to be attached.

Nomination details
The minor-turned-major can add/continue or change the nominee by fi lling up nominee addition or modifi cation form.

Changes to other records
Once changes are carried out to bank records, the minor-turned-major can submit similar documents to AMCs / post office etc. where investments were made in minor’s name. Since demat accounts of minors can be held only on single-name basis, the account opening process has to be redone for a minor-turned-major.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)