.jpg)
Synopsis: The Reserve Bank of India (RBI) has revised its rules, allowing minors aged 10 years and above to independently operate savings and fixed deposit accounts. These changes, effective from July 1, 2025, aim to promote early financial literacy while ensuring parental supervision and responsible banking practices.
The Reserve Bank of India (RBI) has issued a fresh set of guidelines that significantly change how minors – individuals below the age of 18 – can operate their bank accounts. This move is seen as a progressive step towards encouraging financial awareness among children and teenagers while retaining parental oversight to safeguard their financial interests.
According to the new framework, minors can now have savings and fixed deposit accounts opened in their names. These accounts can be managed by their natural or legal guardian, including their mother. More notably, minors aged 10 years and above may also be permitted to independently operate these accounts if they wish to do so. However, this will be subject to limits and conditions determined by each bank, based on their internal risk assessment and policy framework. The terms must be clearly communicated to the young account holder to ensure transparency.
The RBI has directed all banks – both commercial and cooperative – to align their existing policies with the revised norms by July 1, 2025. Until then, the current system of operating minor accounts can continue. The flexibility provided by the RBI also means that these guidelines are not mandatory; banks have the freedom to implement them based on their risk management strategies and customer suitability evaluations.
Additionally, the new framework allows banks to extend various services to minor account holders, such as ATM/debit cards, internet banking, and cheque books. However, in the interest of financial security, these accounts are not allowed to be overdrawn. They must always maintain a credit balance to prevent any misuse or financial mismanagement.
Upon reaching the age of majority (18 years), banks will be required to obtain updated operating instructions and a specimen signature from the account holder. If the account was previously operated by a guardian, the bank must verify and confirm the account balance before transferring full control to the now-adult account holder.
The revised guidelines aim to strike a balance between empowering the youth with financial independence and ensuring that safeguards remain in place. By involving parents or guardians in the process and giving banks the flexibility to assess suitability, the RBI hopes to build a strong foundation of financial literacy among India’s younger population.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult your bank or financial advisor for account-specific guidance.
.jpg)
