Under 18 Stock Market Guide: How to Open Minor Demat Account in Zerodha & Groww

“I am 16, Can I Buy Tata Motors Shares?”

This is the most common question I get from teenagers on Instagram. The hunger to make money early is real. You see your favorite influencers flashing P&L screenshots, and you feel FOMO (Fear Of Missing Out). You have saved ₹5,000 from your pocket money, and you want to start.

But when you download apps like Groww or Upstox, the first thing they ask for is your PAN Card. If you are under 18, the process gets stuck.

Does this mean you cannot invest? Absolutely not.

In India, a minor (someone below 18) CAN own shares, mutual funds, and even gold. The legendary Warren Buffett bought his first stock at age 11. Why should you wait till 18?

In this complete guide, I will show you the exact “Legal Way” to open a Demat account for minors, the documents you need, and the one big tax rule that your parents need to know before you start.

The Golden Rule: Investing vs. Trading

Before you jump in, understand the rules set by SEBI (Securities and Exchange Board of India) for minors.

• Allowed: You can buy stocks and hold them (Delivery). You can invest in Mutual Funds. You can apply for IPOs.
• BANNED: You cannot do Intraday Trading (buying and selling on the same day). You cannot trade in Futures & Options (F&O).

Basically, SEBI wants minors to be “Investors” (long-term), not “Traders” (gamblers). The system automatically blocks intraday orders for minor accounts.

Documents You Need (The Checklist)

You cannot open an account alone. You need a Guardian (Parent) to be the captain of your ship until you turn 18.

Here is what you need to keep ready:

1. Minor’s PAN Card: Yes, minors can get a PAN card! If you don’t have one, apply online at NSDL (Form 49A). It takes 15 days.
2. Minor’s Birth Certificate: Proof of age.
3. Guardian’s KYC: Your father or mother’s PAN Card and Aadhaar.
4. Bank Proof: A cancelled cheque or passbook of the Minor’s Bank Account. (Pro Tip: Open a “Pehla Kadam” account in SBI or a “Smart Star” account in ICICI for kids).

How to Open the Account (Zerodha vs. Others)

Most brokers like Groww, Upstox, and Angel One usually require an Offline Process (filling physical forms) for minors. However, Zerodha has recently launched an Online Process (if the guardian already has a Zerodha account).

Option A: The Online Way (Best with Zerodha)

If your parent already uses Zerodha:

1. Go to signup.zerodha.com/minor.
2. Login with your Parent’s ID.
3. Enter the Minor’s PAN and Date of Birth.
4. Verify the details using the Guardian’s Aadhaar (OTP).
5. Upload the Birth Certificate and Minor’s Photo.
6. E-Sign: The parent has to e-sign the document.
7. Done! The account usually opens in 48 hours.

Option B: The Offline Way (For Groww/Angel One/Others)

If you want to use other brokers or your parent doesn’t have an account:

1. Download the “Account Opening Form” PDF from the broker’s website.
2. Fill it out (There are two signatures required: Guardian’s and Minor’s).
3. Attach photocopies of PAN, Aadhaar, and Birth Certificate.
4. Courier these documents to the broker’s Head Office (Address is usually on the form).
5. It takes 7-10 days to process.

The “Tax Trap”: Clubbing of Income (Very Important)

This is where 90% of people make a mistake.

You might think: “I am a minor, I don’t earn a salary, so I don’t have to pay tax.” Wrong.

According to Section 64(1A) of the Income Tax Act, any money earned by a minor is “Clubbed” (Added) to the income of the parent who earns more.

Example:

• You invest ₹10,000 and make a profit of ₹2,000.
• Your father earns ₹10 Lakhs/year.
• Your ₹2,000 profit is added to his income. He pays tax on ₹10,02,000.

Is there any exemption? Yes. Under Section 10(32), the parent gets a tax exemption of ₹1,500 per child per year.

• If your profit is ₹1,500 or less = Tax Free.
• If your profit is ₹10,000 = Taxable (on remaining ₹8,500).

Exceptions: If the minor earns money through their own “Skill or Talent” (e.g., a child actor or a coding genius winning a prize), that income is taxed separately in the minor’s name. But stock market profit is usually considered “Passive Income” and gets clubbed.

read more – The “Zero Brokerage” Lie: 7 Hidden Demat Charges & Safety Risks

What Happens When You Turn 18?

The day you celebrate your 18th birthday, your Minor Account becomes Freezed (Inactive).

Don’t panic. You just need to convert it into a Major Account.

1. Submit a new “Status Change” form to the broker.
2. Submit your own PAN and Aadhaar (KYC) again as an adult.
3. Sign a new agreement.

Once done, the account becomes a normal account, and you can start Intraday and F&O trading (if you really want to!).

My Advice: What Should You Buy?

Since you are young, you have the biggest asset in the world: TIME.

Don’t look for “Penny Stocks” to double your money in a week.

• Buy Nifty 50 ETFs (NIFTYBEES): Safe, steady growth.
• Buy Bluechip Stocks: Companies you use daily (like Titan, Tata Motors, or Reliance).

Imagine buying 1 share of Titan at age 15. By the time you are 25, that single share could multiply many times, not just in price but also through dividends.

Conclusion

Investing under 18 is not just about making money; it is about building a Habit. By the time your friends get their first job at 22 and start figuring out what a “Demat” account is, you will already have 5 years of experience and a solid portfolio.

So, grab your documents, convince your parents (show them this article!), and start your journey today.

❓ Frequently Asked Questions (FAQ)