Minor Accounts 👶

Who is a Minor? A person who has not completed 18 years of age (Indian Majority Act, 1875).

Can a Minor open a bank account? YES! But with certain rules.

Types of Minor Accounts 📋

For very young children.
Account opened in Minor's name.
Operated by: Natural Guardian (Father/Mother) or Legal Guardian.
Signature: Guardian signs on behalf of minor.
On turning 18: Guardian stops operating. Minor submits fresh KYC and takes over.

RBI allows minors above 10 years to open and operate savings account independently.
Conditions:
- Can sign uniformly.
- Usually no cheque book (or restricted).
- No overdraft allowed (Minor cannot be liable for debt).
- Limits on transaction amount.

Why allowed? To promote financial literacy among children.

Section 26 of NI Act: A minor can draw, endorse, deliver, and negotiate a cheque/bill so as to bind all parties except himself.

Meaning:

Minor can issue a cheque.
If it bounces, Minor CANNOT be sued (No personal liability).
Banker is safe as long as there are funds.
Risk: Never give Overdraft/Loan to minor (Contract with minor is void ab initio - Mohori Bibee case). You cannot recover money!

When minor turns 18:

Account status changes to Major.
Guardian's authority ends immediately.
Former minor must submit fresh KYC (PAN/Aadhaar) and new specimen signature.
Balance is confirmed by him.

Question 1 of 5

1. A minor is a person below age of:

💡 Final Wisdom: "Minors can save, but they can't borrow. Banks love their deposits but fear their loans!" 👶💰

Next up: Accounts of Married Women - Why is this a separate topic? 👩