RBI Allows Children Over 10 years to Manage Bank Accounts on Their Own

In an effort to encourage early financial involvement, the Reserve Bank of India has updated its regulations to allow youngsters ten years of age and up to independently handle their savings and term deposit accounts.

The Reserve Bank of India (RBI) has released updated guidelines that let minors who are ten years of age or older open and manage savings and term deposit accounts on their own. By encouraging early financial literacy, this action will enable young people to handle money sensibly in a secure, monitored banking setting. Nonetheless, banks must make sure that minor accounts never fall into overdraft and always have a credit balance because the RBI has established explicit operational restrictions and requirements based on the bank’s risk management policy.

Important Points

Eligibility by Age 

• Through a parent or legal guardian, minors of any age can open term deposit or savings accounts.
• If they so choose and are allowed by the bank’s policy, minors older than ten may independently manage such accounts.

Details of the Guardian 

• Either a parent, including the mother, or a legal guardian may open a minor account.

Rules for Independent Operation for Minors 

• Up to a certain amount determined by their internal risk management standards, banks with more than ten locations may permit independent operations.
• The account holder must be made fully aware of all such terms.

 Methodology Following Majority Attainment 

• The bank must have new operating instructions and specimen signatures from the account holder when they turn eighteen.

Services Provided to Minor Accounts 

• Depending on the situation, banks may provide services including check books, ATM/debit cards, and internet banking.
• Policy for risk management
• Product appropriateness
• Appropriateness for customers

Requirement for Credit Balance 

• Minor accounts are not permitted to have overdrafts.
• Regardless of how they are run, these accounts must always stay in credit.

Customer Due Diligence 

• Banks must conduct customer due diligence (CDD) at account opening.
• Ongoing due diligence is also required for minor accounts.

Implementation Deadline 

• All banks must introduce new or amend existing policies to comply with these revised norms by July 1, 2025.