What are the RBI Guidelines for Minor Account?

Why Are RBI Rules Important in Accounting for Minors In India?

What Are the Rules for Opening an Account for a Minor in India?

How to Open a Bank Account for Minors?

What Are the Documents Required for Opening a Minor Bank Account?

What Are the Restrictions on Opening Certain Types of Deposit Accounts ?

FAQs About Minor Account and RBI guidelines

Who can withdraw money from minor accounts?

A child above the age of 10 can operate their own account. Banks usually offer them a chequebook and a debit card so that they can withdraw money. Also, the parents of a minor child can withdraw money from their account.

Do I have to pay a tax on the savings parked in a minor account?

Yes. According to Section 64 (1A) of the Income Tax Act, any money a child receives in the bank account is clubbed with their parents' income. So, the parents will have to pay a tax on them per the applicable rates.

What are the benefits of opening a minor account?

Opening a bank account can be beneficial as minors will have first-hand knowledge of operating bank accounts efficiently. This can include online banking, withdrawing cash from ATMs, and depositing a cheque. Also, they can have an idea about money management.

Can a minor bank account operate using UPI?

According to the RBI guidelines, only a minor above 15 has the flexibility to operate their bank account using UPI. However, a minor under 15 who holds a joint account with their parents is not eligible for a UPI transaction.

What are the disadvantages of opening a minor bank account?

Minors can easily become a victim of bank fraud and financial losses. Parents and guardians will ultimately incur these losses. To prevent this, the RBI has given the authority to the banks to limit the transactions.