Can funds be added and withdrawn from the minor account?

While minors cannot directly purchase securities, they can hold and sell securities received through gifts, inheritance, or legal orders. For these purposes, funds can be added and withdrawn from minor accounts, but with certain restrictions. 

Adding Funds to the Minor’s Account

Funds can be deposited into a minor’s trading or Demat account, but these funds are typically used to cover transaction fees, DP (Depository Participant) charges, or other necessary charges. The guardian or parent manages the funds and transactions on behalf of the minor.

However, it is important to note that minors cannot directly use the funds to purchase securities. They are restricted from engaging in active trading or buying new securities themselves.

Withdrawing Funds from the Minor’s Account

Withdrawals can be made from the minor’s account, but only under specific circumstances, such as selling securities that the minor received through gifts, inheritance, or legal orders. The proceeds from such sales can be withdrawn, but the guardian manages the transactions on behalf of the minor.