The question stated as the title of the blog “What is the minimum age limit to invest in share market?” is often confused with the opening of a trading account by a minor. Investing has no age bar. A minor can learn stock market and start investing.
Sir Warren Buffet made his first investment when he was 11 years old. He further adds that” I was wasting my life until then.”
If your child is willing to enter the share market, who knows he may be another Warren Buffet in times to come.
People often argue on the point that the share market requires experience. Also, it is said that it is good to invest only when you have attained a certain age. Well, experience surely counts, but foresightedness and strategy can make a difference too.
We all are aware that the market is subject to volatility. Basis this, it is difficult to anticipate the next market move. Obviously, there are certain trends, charts, patterns which experienced investors follow. However, at times, the market movement may be difficult to judge as well.
Hence, be it a prospective minor investor or an experienced investor, the zeal to sustain the market volatility counts.
How can a minor invest?
Though there is no minimum age limit for investing, there are certain terms and conditions to be followed.
Opening of a trading account
A minor can invest through a Trading/Demat account opened by the minor’s guardian on his behalf. The account will be in the name of the minor.
Also Read: How To Open A Demat Account?
The Guardian mentioned here can be the parents of the minor. In other cases, a relative or someone is known to the minor may submit an application to the court confirming them to be the guardians. A copy of this document is also required to be submitted while opening the trading account.
- PAN card of a minor and the guardian
- Date of birth proof of a minor
- Address proof to be given by the guardian
- KYC application form
Also Read: KYC – Know more about your client
Minor’s position as a major
After majority, the minor has the following two options:
- He/she may close the existing account and open a new trading account. In such case, all the securities can be transferred to a new account.
- He/she may continue with the existing account. The documents related to majority can be submitted with an application to the brokerage firm.
Though there is no minimum age limit on investment, certain legal submissions are mandatory.
In case a minor has interest and is willing to invest in share market, you are free to do so. Two things which are to be considered necessary before investing. Basic knowledge of stock market and ability to decode the financial statement of a company. Additionally, a prospective investor can also decode the financials of a company before investing. If a prospective investor is able to crack the financials to anticipate the future prospects of a company, there should be no hesitation to invest in share market.
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